To address this issue, many regulators have moved to establish common benchmarks on greenwashing, including
The Financial Conduct Authority (FCA) has set out its expectations for institutions doing business in the UK through the FCA Anti-Greenwashing Rules: a stringent framework to prevent greenwashing, focusing on financial products marketed with ESG claims. These rules require firms to substantiate their claims with robust evidence and ensure marketing materials accurately reflect practices. The FCA’s approach involves more interaction between supervision and enforcement, emphasising faster investigations and resolutions of issues through supervisory action rather than lengthy enforcement procedures.
United Kingdom
In the EU, noting uncertainty around the meaning of greenwashing, the European Supervisory Authorities (ESAs) proposed a definition of the term and the types of sustainability claims in their Progress Report on Greenwashing of May 2023. This was built upon in the Final Report on Greenwashing released in June 2024, where the ESAs urged national authorities to scrutinise sustainability claims within their jurisdictions and ensure rigorous oversight following the definitions set out in the initial report.
European Union
In Australia, the government announced the development of a sustainable finance taxonomy as a key priority of its Sustainable Finance Strategy. The government has partnered with the Australian Sustainable Finance Institute to develop the taxonomy, noting the “absence of common understanding and clear definitions increases risks of greenwashing and undermines investor confidence in sustainable finance".
Australia