Greenwashing – A New Regulatory Risk

This blog post was first published by Compliance Monitor on April 6, 2022.

A key plank to the Government's regulatory ESG agenda is simple: investment in sustainable projects and companies will assist the UK in meeting its environmental targets.  Consumer interest appears to be aligned: there is a genuine appetite to advance the climate agenda through investment.

To achieve its objectives, the Government is focused on disclosure and transparency.  Naturally, the efficacy of the disclosure model is rooted in trust, as acknowledged by Nikhil Rathi, when speaking before the COP 26 in November last year, "Recently, we've seen growing scepticism about some companies' and financial firms' ''green'' claims. We can't let this greenwashing persist and risk the flow of much-needed capital to help secure our futures".¹  However, it is also rooted in harmonisation, relying on a common understanding of how a business' green credentials can be measured and described.   If