(This news service has a programme – Wealth For Good Awards – designed to highlight what wealth managers are doing to ensure that environmental, social and governance considerations are imbedded into their practices. To find out more about the awards and the 2024 programme, click on this link.)

In the US, the (SEC) has acted against the practice. The reportedly issued regulations and put in place technologies to crack down on greenwashing. From 2022, banks in Singapore must conduct stress tests which include climate-related scenarios while making required disclosures to ensure that they are managing risks related to climate change and other environmental concerns.

FCA statement
The UK regulator said results from its latest Financial Lives survey showed that 81 per cent of adults surveyed would like their investments to do some good as well as provide a financial return. 

The FCA said it is consulting on extending the requirements for portfolio managers to show how sustainable investments are labelled and explained, making consumer choice easier. 

The proposed labelling and Sustainability Disclosure Requirements (SDR) for portfolio managers mostly mirror those introduced for asset managers in November 2023. They include: product labels to help consumers understand what their money is being used for naming and marketing requirements so that products can only be described as having positive outcomes on the environment and/or society when those claims can be backed up.

"Confirming the new anti-greenwashing guidance and our proposals to extend the Sustainability Disclosure Requirements and investment labels regime are important milestones that maintain the UK’s place at the forefront of sustainable investment,” Sacha Sadan, director of environmental, social and governance, FCA, said in a statement about the measures.

Caroline Greenwell, partner at London law firm , to give an example of warnings about the practice, said in a paper (21 September 2022): “Greenwashing can also create reputational issues which undermine the overall trust in sustainable finance and its effectiveness in the battle against climate change at a time when there is more pressure than ever on financial institutions and all other businesses to implement sustainable, environmental and social changes in their various business interactions.”

Last November, a senior figure at international multi-family office said that he welcomed debate about challenges such as “greenwashing” and uneven data for ESG ideas, because it reminded investors that they must fully understand what they own.