International law firm RPC has welcomed this week’s announcement by the Financial Conduct Authority that it intends to crack down on greenwashing in the market.

RPC partner Chris Ross, who specialises in commercial, banking and fraud disputes, said: "Concerns have been apparent in the market for some time that products labelled as ‘green’ or ‘sustainable’ in fact had ESG credentials that were questionable at best, driven in large part by the lack of regulation in this area.

"The FCA's intervention is therefore a welcome step forward in this area in clarifying how firms should label their products.

"To what extent consumers and investors are prepared to prioritise genuinely ESG-compliant products over more traditional investments that may offer higher returns remains to be seen."

Announcing the watchdog's plans earlier this week, Sacha Sadan, the FCA’s director of environment social and governance, said greenwashing misleads consumers and erodes trust in all ESG products.

“Consumers must be confident when products claim to be sustainable that they actually are. Our proposed rules will help consumers and firms build trust in this sector,” she added. “This supports investment in solutions to some of the world’s biggest ESG challenges. This places the UK at the forefront of sustainable investment internationally. We are raising the bar by setting robust regulatory standards to protect consumers in line with our wider FCA strategy.”

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