Letters: The FCA is on the attack
[Re: FCA poised to clampdown on greenwashing with ‘ESG’ curbs, 25 Oct]
The FCA comments on greenwashing shouldn’t come as a surprise: the FCA has been flagging greenwashing as a concern for some time. Moreover, it’s a continuation of the FCA’s work in other areas to ensure that every product ‘does what it says on the tin’.
Whether an investor is institutional or retail, they should be able to trust the description of a product, including what it is meant to deliver, the likelihood of that happening and the risks of it failing to meet expectations.
But ESG products add another layer of complexity. For a normal investment, the return can be measured in money. But what does it mean that a product will be sustainable? Is it enough that it does less harm than comparable investments or must it actually do good? Designing the measurements that define successful E and S and G is a crucial first step and the FCA appears to want to lead the charge.
The metrics for measurement need to be agreed. Without them it is impossible to compare like with like. Ultimately, the FCA’s desire to hold firms to account and ensure that money is used for the greater good should be applauded.
Matthew Nunan