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With global regulators increasingly seeking to combat greenwashing in the investment industry, the U.K.’s Financial Conduct Authority (FCA) issued guidance on its looming new anti-greenwashing rules — and it’s proposing to extend requirements to portfolio managers too.

New rules aiming to ensure that investment products pitched as sustainable are accurately labelled, and that the products themselves match their claims, are due to take effect in the U.K. on May 31.

“The new rule is designed to protect consumers by ensuring sustainable products and services they are sold are accurately described,” said the FCA, noting that investor demand for sustainable products continues to rise.

Ahead of the new requirements taking effect, the FCA issued guidance designed to help the investment industry comply with the new rules. The regulator also launched a consultation on extending the labelling and disclosure requirements, which currently target asset managers, to portfolio managers.

The proposal to apply anti-greenwashing requirements to portfolio managers is focused on firms providing services to retail investors, including the creation of model portfolios, customized portfolios and bespoke portfolio management services (including private equity, and other private market investments).

“We want to help consumers to navigate the sustainable investment market by extending the [anti-greenwashing requirements] to portfolio management services,” the FCA said in its consultation paper.

“This would mean applying the labelling regime, naming and marketing rules, and disclosure requirements to portfolio managers,” it said. “This package of measures should help to ensure that portfolio management offerings that claim to be sustainable investments meet high standards and enhance trust in the market.”

The deadline for submitting feedback to the consultation is June 14.

The FCA said it aims to finalize its rules in the second half of 2024.

“Confirming the new anti-greenwashing guidance and our proposals to extend the sustainability disclosure requirements and investment labels regime are important milestones that maintain the U.K.’s place at the forefront of sustainable investment,” said Sacha Sadan, director of environmental, social and governance at the FCA, in a release.

“Consumers care about investing in products that have a positive impact on the planet and people. That’s why we want to boost the integrity of the market and ensure people can make informed decisions with their money,” he added.

Canadian regulators are also focused on combatting greenwashing.

Last month, the Canadian Securities Administrators issued its own revised guidance for investment funds on ESG-related disclosure, which addressed a range of greenwashing risks — including funds’ investment objectives, fund names, investment strategies, risk disclosure, continuous disclosure and sales communications.