FCA anti-greenwashing rule: how we can help

The UK Financial Conduct Authority (FCA) has introduced a new anti-greenwashing rule (the AGW rule) and related anti-greenwashing guidance (the AGW guidance).

Both the AGW rule and the AGW guidance come into effect on 31 May 2024. Firms have a little over a month from the publication of the finalised guidance (on 23 April 2024) to ensure that they are compliant with this significant new regime. The FCA has confirmed that it is not allowing firms any transitional period or implementation period to become compliant.

The AGW rule applies to FCA regulated firms, when they refer to the environmental or social characteristics of products or services, in any client communication to UK clients or financial promotion to UK persons (including any financial promotions approved by an FCA regulated firm).

The AGW rule requires firms to ensure that their sustainability claims are fair, clear and not misleading. The headline AGW rule is fleshed-out with detailed guidance on how to ensure that these claims are correct, clear and complete, and that comparisons are fair and meaningful.

The AGW rule applies to all FCA regulated firms, in all sectors of the financial services industry, in respect of all products and services. It is not limited only to asset management or investment products (unlike the rest of the FCA’s sustainability disclosure rules). The AGW applies to both retail and professional communications, including business-to-business as well as business-to-consumer communications.

Given the very short time frame to ensure compliance, and the very extensive range of firms and documents in-scope of the AGW regime, FCA-regulated firms are likely to need external legal support with their AGW rule projects.

Simmons & Simmons stands ready to advise firms on these requirements. We’ve set out in the attached document the many ways in which we are advising and assisting firms with AGW compliance. We’d be delighted to discuss how we can help your firm. Please get in touch with your regular Simmons & Simmons contact, or any of our specialist Financial Services experts listed.

For details of how we can assist you with the FCA’s other Sustainability Disclosure Requirements (SDR) and investment labels rules – click here.