UK Regulatory Landscape: What Firms Need to Know for the New Anti-Greenwashing Rule

16th May 2024

In a move towards greater transparency and accountability, earlier this year, the UK Financial Conduct Authority (FCA) introduced the anti-greenwashing rule, known as the AGW rule. This regulation, along with its recent accompanying anti-greenwashing guidance, is set to come into effect on 31 May 2024, marking a significant shift in the UK financial services industry’s approach to sustainability. 

Understanding the AGW Rule 

The AGW rule targets FCA-regulated firms and how they communicate the environmental or social aspects of their products or services to UK clients. It mandates that firms ensure their sustainability claims are fair, clear, and not misleading. This means providing accurate information that enables consumers to make informed decisions about the products or services being offered. 

Compliance Requirements 

Unlike some regulations that offer transitional periods, no such grace period is provided by the FCA. This means that FCA-regulated firms need to hit the ground running to meet the requirements of the AGW rule by the deadline. 

How to Ensure Compliance with Zeidler Assistance 

Navigating the complexities of the AGW rule may seem daunting, but our legal and ESG teams alongside our Legal-Tech solutions are readily available to support and offer practical guidance. With the deadline fast approaching, we recommend fund professionals avail of our Marketing Material Review (MMR) Tool to ensure investment fund compliance support and practical insights in minutes. 

 The automated MMR tool enables fund professionals to upload a variety of marketing materials, ranging from factsheets and brochures to pitch presentations and commentary. These materials will be reviewed against a comprehensive array of UK regulations governing marketing communications, including the newly introduced anti-greenwashing rules by the FCA and COBS. Additionally, it checks consistency between the marketing material and the fund documents, such as the UK UCITS KIID, PRIIPs KID and the prospectus.   

 In addition, our dedicated ESG legal team, led by Elisa Forletta-Fehrenberg, is on hand to provide practical guidance with a holistic approach to support throughout the compliance process. 

Key Takeaways  

As the deadline for compliance with the AGW rule draws near, firms must prioritise understanding and adhering to the requirements set out by the FCA. By leveraging our legal-tech MMR Tool, firms can take proactive steps to avoid potential breaches and demonstrate their commitment to transparency and sustainability. 

 

Additional Resources:

Book a Consultation with our ESG Legal Team

Webinar

Webinar On-Demand Preparing for Change: Navigating the Upcoming UK SDR Regime

Guide

Navigating the Upcoming UK SDR Regime A Practical Guide

Blog

Breaking Down the Latest UK Regulations: Unveiling the Sustainability Rules for Financial Products

Author

Elisa Forletta-Fehrenberg