As part of its escalating fight against greenwashing, the U.K.’s Financial Conduct Authority (FCA) is establishing a working group to help financial advisors build their expertise in sustainable finance.
Along with an industry trade group, the FCA is establishing a group charged with supporting the industry in providing advice to investors about investment products with purported sustainability features.
“It is vital that advisers are empowered to fully comprehend and integrate sustainability risks as material financial considerations,” said the chair of the new group, Daniel Godfrey, in a release.
“Collectively they can help to steer the whole investment industry towards an alignment of investment strategies with the long-term needs and values of clients.”
The FCA, which will participate in the working group as an active observer, has asked the group to report on “how the advice sector can be supported in delivering good practice” in the second half of 2024.
The working group’s launch comes in the wake of the FCA’s recent adoption of a package of measures designed to combat greenwashing and build the U.K. asset management industry’s sustainable investment offerings, including new product labelling, naming and marketing requirements.
At the time, the regulator also adopted an industry-wide anti-greenwashing rule, which takes effect May 31, and it promised to create the working group for financial advisors.
“We believe in the value of solutions being led and designed by industry and look forward to seeing the group focus on practical ideas to support the advice sector in building its capabilities on sustainable finance,” said Sacha Sadan, director of environmental, social and governance at the FCA, in a release.
Godfrey will appoint the group’s other members from the industry. He was previously chief executive of the Investment Association and now serves on the independent governance committee at U.K.-based financial firm Legal and General Group plc, and is a senior adviser to Moneybox and ShareAction.
Industry trade group the Personal Investment Management & Financial Advice Association will provide the working group’s administrative functions.