Asset Management

FCA forces funds to drop ‘ESG’ labels in greenwashing crackdown

'Exaggerated, misleading or unsubstantiated claims' about ESG credentials have been damaging consumer confidence, City watchdog says

Green fund branding will feel the pressure from rules set to come into force next year
Green fund branding will feel the pressure from rules set to come into force next year Photo: Getty Images

Asset managers could soon be forced to remove ESG and sustainability branding from their funds if they fail to meet the Financial Conduct Authority’s new green criteria.

As part of  rules set to come into effect next year, asset managers will be barred from using terms like "green" to market funds that do not meet the regulator's standards.

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