UK’s FCA has met with asset managers on ESG but is yet to conduct greenwashing investigations

The Financial Conduct Authority currently has no active investigations into allegations of greenwashing, it told Responsible Investor, but has pushed a number of firms to alter ESG-related fund and website disclosures.

The UK regulator, which oversees more than 50,000 financial services firms and financial markets, is yet to follow counterparts in Germany and the US, which have undertaken a series of high-profile greenwashing investigations. German police raided the offices of DWS and Deutsche Bank as part of a probe into alleged greenwashing at DWS – an accusation it denies. The Securities and Exchange Commission has opened investigations into both DWS and Goldman Sachs Asset Management over ESG issues, and recently fined BNY Mellon $1.5 million for “misstating and omitting” information about ESG considerations in funds it managed.

The FCA said it was “actively monitoring the market” for signs of greenwashing – including potentially misleading marketing of sustainability-related funds – and was willing to take enforcement action where necessary.

In its response to a Freedom of Information request submitted by RI, the regulator also revealed that it had been in dialogue with an undisclosed number of fund managers over both fund and website disclosures and ESG integration.

Supervisory staff, the FCA said, have visited a number of managers “to further understand their approaches to implementing ESG strategies” and will give feedback to ensure individual firms meet its expectations. It has also engaged in dialogue with “a small number” of firms resulting in them updating fund and website disclosures alongside other undisclosed changes.

The FCA declined to give any further information on the visits but RI understands that seven managers of varying sizes have been subject to interventions.

The regulator has previously said that there is a “clear rationale” for bringing ESG ratings providers within its regulatory sphere. In a separate market bulletin published the same day, the FCA said it was mulling an intervention in the ESG debt market as it raised concerns over misalignment between labelled debt frameworks and prospectuses over the planned use of proceeds. It also said it may consider the case for regulatory oversight of second-party opinion providers.