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𝐒𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧𝐢𝐧𝐠 𝐠𝐫𝐞𝐞𝐧𝐰𝐚𝐬𝐡𝐢𝐧𝐠 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬: 𝐅𝐂𝐀’𝐬 𝐧𝐞𝐰 𝐫𝐮𝐥𝐞𝐬 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐚𝐥𝐢𝐠𝐧𝐦𝐞𝐧𝐭 𝐰𝐢𝐭𝐡 𝐄𝐔 𝐝𝐢𝐫𝐞𝐜𝐭𝐢𝐯𝐞𝐬 🌍 On May 31, 2024, the FCA introduced an anti-greenwashing rule as part of its Sustainability Disclosure Requirements (SDR) to identify and challenge misleading sustainability claims, complementing the EU’s directives. This follows notably the ban on green claims by the Advertising Standards Authority against several entities such as BMW, MG, and Transport for London. 𝐅𝐂𝐀’𝐬 𝐥𝐚𝐭𝐞𝐬𝐭 𝐫𝐮𝐥𝐞: 1. 𝐀𝐩𝐩𝐥𝐢𝐜𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐚𝐧𝐝 𝐬𝐜𝐨𝐩𝐞: Applies to all FCA-authorized firms communicating with UK clients or promoting financial products/services in the UK. Covers a wide range of communications, including statements, strategies, targets, policies, information, and promotional materials. 2. 𝐑𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭𝐬: - 𝘍𝘢𝘪𝘳, 𝘤𝘭𝘦𝘢𝘳, 𝘢𝘯𝘥 𝘷𝘦𝘳𝘪𝘧𝘪𝘢𝘣𝘭𝘦: Claims must match actual sustainability characteristics, be clear, not misleading, and capable of being substantiated. - 𝘛𝘳𝘢𝘯𝘴𝘱𝘢𝘳𝘦𝘯𝘵 : Information must be clear, complete, without omissions, and consider the full life cycle of the product/service. - 𝘔𝘦𝘢𝘯𝘪𝘯𝘨𝘧𝘶𝘭 𝘤𝘰𝘮𝘱𝘢𝘳𝘪𝘴𝘰𝘯𝘴: Comparisons to other products/services must be fair and meaningful. 3. 𝐈𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬 𝐟𝐨𝐫 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬: - Fines, operational restrictions, or prohibitions; mandatory withdrawal of misleading communications/documents; increased litigation risk if the FCA’s "naming and shaming" policy is implemented; 𝐩𝐮𝐛𝐥𝐢𝐜 𝐢𝐝𝐞𝐧𝐭𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐟𝐢𝐫𝐦𝐬 𝐮𝐧𝐝𝐞𝐫 𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐠𝐚𝐭𝐢𝐨𝐧 𝐞𝐯𝐞𝐧 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐞𝐧𝐟𝐨𝐫𝐜𝐞𝐦𝐞𝐧𝐭 𝐚𝐜𝐭𝐢𝐨𝐧. 𝐄𝐔’𝐬 𝐥𝐚𝐭𝐞𝐬𝐭 𝐝𝐢𝐫𝐞𝐜𝐭𝐢𝐯𝐞: Entered into force on March 27, 2024, amending the Consumer Rights Directive and the Unfair Commercial Practices Directive. 1. 𝐒𝐜𝐨𝐩𝐞: Misleading commercial practices include false information about a product's reparability or recyclability; environmental claims must be backed by verifiable commitments and targets, regularly verified by an independent third-party expert; prohibits the use of sustainability labels not based on a certification scheme or not established by public authorities. 𝐃𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐜𝐞𝐬 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐭𝐡𝐞 𝐔𝐊 & 𝐄𝐔 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬 - The FCA’s rule applies specifically to FCA-authorized firms, while the EU’s regulations apply to all traders marketing products to EU consumers. -The EU regulations include specific bans on certain types of claims and require the use of approved certification schemes or public authorities for sustainability labels, which is not explicitly mentioned in the FCA’s rule. No Impunity #Greenwashing #Regulations #FCA #EUDirectives #Compliance #Litigation