A Sustainable Investment in Journalism

A sustainable business requires diverse revenue streams. ESG Investor now operates a subscription service as of Tuesday 14th May. To find out more please get in touch with our subscription team on subscriptions@esginvestor.net

FCA Opens First Climate Investigation

The UK’s financial watchdog has launched its first enforcement investigation into a company over climate-related issues, environmental law charity ClientEarth has revealed. In response to a Freedom of Information (FOI) request, the Financial Conduct Authority (FCA) disclosed one active enforcement case, opened in July 2023. The regulator did not provide any further information on the type of firm or misconduct it was probing, ClientEarth said. The watchdog had previously refused to reveal what greenwashing or climate-related cases it was investigating, despite its transparency obligations as a public authority. According to ClientEarth, the FCA repeatedly exceeded the FOI timeframes for review, leading the charity to escalate the matter in April by filing a complaint to the Information Commissioner. The investigation is still ongoing, it added. “One active investigation is welcome news,” said Megan Clay, Lawyer at ClientEarth. “However, one case is still too few, and the FCA has suggested that this investigation does not relate to greenwashing.” The charity warned that investors and consumers may be receiving inaccurate information due to inaction by the regulator, claiming the FCA lagged its US and Australian counterparts, which have handed out several fines to financial institutions for breaching existing law. “The good news is that the FCA is now in a strong position to act,” Clay added. “A new anti-greenwashing rule took effect just last month, and campaigners have already urged the regulator to investigate climate-related claims by the UK’s biggest high-street banks.” Separately, the UK Advertising Standards Authority has banned misleading climate-related ads from Shell and HSBC, and a Competition and Markets Authority investigation into three fashion brands – ASOS, Boohoo and George at ASDA – has led the companies to pledge to use only “accurate and clear” claims earlier this year.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2024 ESG Investor Ltd. Company No. 12893343. ESG Investor Ltd, Fox Court, 14 Grays Inn Road, London, WC1X 8HN

To Top