The Anti-Greenwashing Rule: Understanding and Managing the Risk

Anti-Greenwashing Training Introductions

• Welcome, agenda/objectives

What is Sustainability?

• Understanding sustainability
• Evolving client priorities

Greenwashing

• Definitions
• How can it occur

Current Regulatory Position

• Sustainability Disclosure Requirements
• The EU equivalent – Sustainable Finance Disclosure Regulation (SFDR)
• The Four Sustainability Labels
• Product Descriptors and Associated Rules
• FCA Commentary on Greenwashing
• The Advertising Standards Authority – additional detail

The Anti-Greenwashing Rule (effective May 31^st, 2024)

• Claims should be correct and capable of being substantiated
• Claims should be clear and presented in a way that can be understood
• Claims should be complete – they shouldn't omit or hide important information
• Comparisons should be fair and meaningful
• Links to the existing Financial Promotions rules
• Anti-greenwashing training provides useful examples of good and poor practice

Greenwashing in Practice

• Seven Deadly Sins of Greenwashing
• Plus four more
• Case studies – where firms got it wrong (and how to avoid it)

Summary

• Anti-greenwashing course wrap-up
• Questions and answers
• Open forum

With over 20 years of training experience in financial services, Redcliffe’s anti-greenwashing course trainer is well-placed to support you across crucial compliance-related topics. He is a former Head of Education for HSBC covering the UK and Europe, responsible for regulatory and financial crime-related compliance learning. His time at HSBC was during intense scrutiny from regulators and government functions during the bank’s Deferred Prosecution Agreement.

Other roles include leading the Monitoring and Testing programme for a UK Wealth Manager, and Senior Vice President responsible for Global Risk & Compliance training at a US-based bank. He also worked in the Insurance Firms division at the Financial Conduct Authority (in the FSA days) where he was the divisional expert for the rules and outcomes required under the Training & Competence handbook.

The HSBC role and five years at Barclays in their Private Clients and Wealth functions have seen our trainer work with retail, commercial, wholesale and private banking channels. Since leaving HSBC, he has worked with the compliance, HR and operational teams of firms to enhance their regulatory understanding, as well as delivering content across private equity firms, investment houses, banks and wealth managers. He regularly delivers core programmes for TISA and the Investment Association.

He is a former member of the Investment Management Association Training & Education Committee and won the Thomson Reuters award for “Most Effective Compliance Training at a Regulated Firm” in 2010.

• Anti-greenwashing training articulates why Greenwashing is such a regulatory concern for the FCA
• Training helps participants understand the threat to consumer protection by way of misrepresenting sustainability
• Define Greenwashing and provide relevant examples
• Recognise the terminology that can be used and the language that can only be used with care
• Refer to relevant international regulations as required
• Explain the anti-greenwashing rule effective May 31st, 2024
• Connect these requirements to existing COBS and Financial Promotions rules
• Recognise several common typologies used to Greenwash products that must be avoided within your firm.

Redcliffe Training’s anti-greenwashing course is suitable for all staff involved in the design, approval, operation, monitoring and auditing of financial products that make any reference to the sustainability characteristics of those products.

Hot on the heels of the EU regulation, the FCA published their Sustainability Disclosure Regulation which included an anti-greenwashing rule. This rule became effective May 31st, 2024 and additional guidance was published in April the same year.

Customers increasingly want ‘Green’. Firms may suffer reputational damage and commercial loss if they are not seen to be ‘Green’. Firms may be tempted to ‘Greenwash’ their products i.e. take an existing product, paint it green, and sell it to unsuspecting consumers who believe their needs and objectives are being appropriately met. This risks harm to consumers and damages the reputation of the industry as well as the integrity of the marketplace.

This greenwashing course explores the requirements, the risks, and the practical steps that can be taken. It provides participants with a solid rationale for building their own internal anti-greenwashing control frameworks.

We consider operational management of sustainable products as well as environmental claims within marketing activity.