Amid extensive feedback on its consultation, the U.K.’s Financial Conduct Authority (FCA) is pushing back the expected launch of its anti-greenwashing rules.
Last year, the FCA issued a paper setting out a proposed new regime to combat greenwashing in the asset management industry by setting labelling requirements for sustainable investment products. The proposal also included new disclosure demands and restrictions in firms’ marketing and product-naming practices.
That consultation wrapped up on Jan. 25, and the regulator had hoped to finalize its policy by mid-year with the new rules taking effect by mid-2024.
However, after the consultation generated several hundred responses, the FCA now says its new rules won’t be ready until the third quarter of this year. The responses highlighted potential compliance challenges and other considerations for regulators.
“There is broad support for the proposed regime and outcomes we are seeking to achieve, and we have received rich, constructive feedback on some of the detail,” the FCA said Wednesday in a statement.
“We are carefully considering the feedback to ensure that first and foremost the regime protects consumers but also recognizes and takes account of any practical challenges that firms may have.”
The regulator said it will be “considering our approach to the marketing restrictions, refining some of the specific criteria for the labels and clarifying how different products, asset classes and strategies can qualify for a label, including multi-asset and blended strategies.”
Additionally, the FCA acknowledged that investors should continue to have access to investment products that don’t necessarily qualify for a “green” label but still have sustainability-related characteristics.
The regulator also indicated that it’s seeking to make its regime compatible with rules in other markets, “and will continue to consider how to further support compatibility, while emphasizing that we need robust standards for the U.K. to remain at the global forefront of sustainable investment.”
The delay in finalizing the new anti-greenwashing regime will also result in the effective date of the new rules being pushed back.
Ultimately, both investors and the asset management industry should benefit from its anti-greenwashing efforts, the FCA noted.