November 9, 2022
FCA proposes new rules to tackle greenwashing

The Financial Conduct Authority (FCA) is recommending a series of new announcements including investment product sustainability labels and restrictions on how terms like ‘ESG’, ‘green’ or ‘sustainable’ can be used. This comes in a bid to restrict greenwashing. The measures are part of potentially numerous regulations with the aim of protecting consumers as well as improving trust in sustainable investment products. The work forms part of the commitment made in the FCA's ESG Strategy and Business Plan to develop trust and integrity in ESG-labelled instruments, products and the supporting ecosystem.

Recently, there has been a rise in the number of investment ‘green’ products or making wider sustainability claims. Exaggerated, misleading or unsubstantiated claims about ESG credentials damage confidence in these products. The FCA is determined to ensure that consumers and firms can trust these products which are claimed to have sustainability characteristics.

Sacha Sadan, the FCA’s Director of Environment Social and Governance, said:

'Greenwashing misleads consumers and erodes trust in all ESG products. Consumers must be confident when products claim to be sustainable that they actually are. Our proposed rules will help consumers and firms build trust in this sector. This supports investment in solutions to some of the world’s biggest ESG challenges. This places the UK at the forefront of sustainable investment internationally. We are raising the bar by setting robust regulatory standards to protect consumers in line with our wider FCA strategy.' 

The FCA seeks:

  • Sustainable investment product labels, giving consumers the confidence to identify the right products for them.
  • Greater descriptive disclosures, suitable for institutional investors or retail investors keen to find out more.
  • Restrictions on how certain sustainability-related terms – such as ‘ESG’, ‘green’ or ‘sustainable’ – can be used in product names and marketing for products which don’t qualify for the sustainable investment labels.
  • Consumer-facing disclosures to help consumers understand the key sustainability-related features of an investment product.


The FCA is increasing its supervisory engagement on sustainable finance and enhancing its enforcement strategy by verifying how firms have replied to the expectations set out in the Dear Chair letter issued to authorised fund managers in July 2021.

Read CP22/20 (PDF)

The consultation is open until 25 January 2023. The FCA intends to publish its final rules by the summer of 2023.

Read more: FCA