Sustainability Group Slams UK Regulator For Postponing ESG Rules
Sustainability Group Slams UK Regulator For Postponing ESG Rules | OilPrice.com
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The Financial Conduct Authority (FCA) has come under fire from a top industry group today after it announced it would delay a key set of regulations for environmental, social and governance (ESG) investment products.
The City watchdog had been due to publish its policy statement on so-called Sustainability Disclosure Requirements and investment labels in the third quarter of this year, which would force firms to give greater details on products being flogged as green and eco-friendly.
Regulators in the UK have been looking to clampdown on rampant greenwashing by asset managers as firms slap dubious green credentials on funds and products. However, in an update on timelines, the FCA said it would now delay its planned rules until the final three months of the year.
The kickback has drawn the ire of a top sustainability group who slammed “yet another delay” from the regulator as “deeply disappointing”.
“This delay is symptomatic of the slow pace of implementation of other policies announced in the [government’s] Green Finance Strategy in March this year, including corporate disclosure requirements and the Green Taxonomy, which must all be progressed as a matter of urgency,” James Alexander, Chief Executive of UK Sustainable Investment and Finance Association, said.
“If the government is serious about making the City, and the UK as a whole, a global leader in green finance, it needs to deliver, not delay,” Alexander said.
The regulator consulted on rules for the sector between October last year and January due to what it said were “growing concerns that firms may be making exaggerated, misleading or unsubstantiated” sustainability claims about their products that “don’t stand up to closer scrutiny”.
The FCA has threatened to become a tough enforcer in the ESG space despite the delays. The watchdog’s ESG chief Sacha Sadan has said that its plans could flush out nearly two-thirds of the current ESG market if implemented in their current form.
An FCA spokesperson said today the planned rules are “an important piece of work” and it is “vital [the regulator] get this right in order to protect consumers.”
“We have listened to the feedback we received as part of the consultation process and are carrying out some further consumer research,” the spokesperson added. “We will publish our final rules in Q4.”
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Related Knowledge Center: Climate economics
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