It is no secret that the Swiss financial system wants to establish itself as a global hub of fixed funds. Suffice it to say that funding that takes into account ESG (environmental, social and administrative) criteria already accounts for more than 50% of the country’s total. Another aspect of the currency is the increased pressure on banks and investors to scrutinize the ESG criteria they use and the data they produce on whether or not they meet these requirements.
Complaints of green wash practices (“green wash” = strategy of trying to mislead consumers into persistence practice) are increasingly common and there are no clear criteria to define how consistent banks and institutions should respond. Training also does not need to talk about green washing in the absence of pre-defined parameters about its concept.
Due to the lack of clarity on standard procedures and the minimum elements that constitute their fraud, the Swiss Financial Market Oversight Authority (FINMA) – the government agency responsible for regulating financial regulation in the country – and the federal government decided to work together in the formation of benchmarks for standardizing information on banks and investment funds and Parameters. Another central focus of the project is that its results should be delivered in 2022, and that defining what constitutes fraud in this area (green washing) is because the concept has no legal definition.
Through these movements, Switzerland not only wants to establish itself as the most important financial hub for sustainable practices in the world, but also to establish itself as a model for good practices in preventing and investigating “green wash” fraud.
The movement in the UK is similar. The Competition and Market Authority (CMA), the country’s leading competition and consumer authority, is warming its hands to launch investigations against greenwashing practices in the coming months. It targets British or foreign companies that sell supposedly green products to British consumers that are actually “normal”.
For this purpose, CMA has recently prepared and published a guide with parameters and guidelines that should not make distortions in the so-called standard products advertisements and help consumers to identify potential scams.
Guide, CMA Guidance on Environmental Claims on Goods and Services: Helping Businesses Comply with their Consumer Protection Act It is approximately sixty pages long and is based on six principles: i) Product reports on sustainability must be accurate and accurate; ii) Claims for materials to be stable must be clear and unambiguous; iii) Claims should not omit or obscure relevant and important information; iv) comparisons between green and non-green products should be reasonable and meaningful; v) Claims for the consistency of the goods must take into account the entire life cycle of the product or service; And, finally, vi) the claims must be proved.
The strength of the law is not right for the guide, but the CMA’s expectation is that it will help identify bad habits in the market, and in doing so, its investigation may be seen as evidence in actions against regulatory agencies and institutions before the judiciary.
The right to focus on consumer protection and the right not to be affected by the green sweep establishes a fundamental incentive / pressure for companies to expedite their internal processes to avoid exposure and potential penalties.
The guide can be found in English Here.