The Treasury Committee has described FCA’s proposals on sustainability disclosures intended to prevent investment funds from greenwashing as “lopsided”. It has written to FCA asking it to conduct a more detailed cost-benefit analysis of its proposals, given it has not said how much it may cost consumers who invest in funds that greenwash to move their investments into new sustainable funds. FCA has previously said that it thinks one third of funds currently labelled as “green” would not meet the requirements and another third would choose not to use the label. It is also concerned that FCA will not be seeking redress for customers who have been misled into investments which are not in fact green. Its final concern is that it is possible that tighter regulation may drive funds away from ESG investing and thereby reduce customer choice.
