New measures proposed by a UK regulator to tackle greenwashing could involve the use of terms such as “ESG” (environmental, social, and corporate governance), “green” or “sustainable ” restrict.
The Financial Conduct Authority (FCA) on Tuesday announced a series of new measures to combat greenwashing, an issue that has become increasingly important in the fashion and other industries as consumers struggle to see through vague or misleading sustainability claims.
The supervisory authority proposes the introduction of quality labels for “sustainable products with investment potential”, based on objective criteria and divided into three categories. A category is reserved for products whose sustainability improves over time.
In this case, the use of terms such as “ESG”, “green” or “sustainable” in the designation and marketing of products that do not qualify for the seal would be restricted.
‘Greenwashing undermines trust’
It also proposes a more general “anti-greenwashing” provision applicable to all regulated companies to avoid misleading product marketing.
“Greenwashing misleads consumers and undermines trust in all ESG products. Consumers need to be able to trust that products that claim to be sustainable actually are. Our proposed rules will help consumers and businesses build confidence in this sector,” said Sacha Sadan, the FCA’s Environment Social and Governance Director. “This will support investments in solutions to some of the world’s biggest ESG challenges. The United Kingdom is thus playing a pioneering role internationally in the field of sustainable investments. We are raising the bar by setting strong regulatory standards to protect consumers, in line with our overall FCA strategy.”
The FCA’s consultation runs until January 25, with the final rules expected to be published by the end of the first half of 2023.
This translated and edited post previously appeared on FashionUnited.uk.