The UK should take steps towards banning ‘greenwashing’, MP’s have written today, by making environmental labelling compulsory for consumer financial products and task regulators to stop misleading claims.
It comes as climate activists smashed windows at HSBC’s Canary Wharf headquarters this morning, in protest of the bank’s investment policies.
In the run-up to the UK’s hosting of the United Nations climate summit, COP26, the government has increasingly prioritised green issues.
However, the lack of details in its plans to tackle the warming climate and use of unsustainable resources has faced criticism from environmental groups – which has led to a series of climate protests in the City.
In a new report, a House of Commons’ cross-party Treasury Committee urged the government to ensure financial regulation was in line with its own commitments, like reaching net-zero emissions by 2050.
“It is clear that in some cases the labels or descriptions of ‘green’ or ‘climate-related’ indices do not necessarily match legitimate consumer expectations of what they would commonly be understood to mean,” the report said.
The government should also reveal how much of a premium it was willing to offer investors to buy new ‘green’ government bonds rather than conventional debt, the report said.
The UK’s finance sector should be active in the discussion on mandatory green labels for investments, the report said, adding that regulators should also have powers to ensure labelling is not deceptive.
The Financial Conduct Authority should team up with the Treasury to “consult on the merits of making climate or carbon labels for consumer financial products mandatory” and on “how best to make such labels readily and widely understood”.
“The UK is a global leader in financial services. When the world’s eyes are on us for COP26, we must show that we can also be a green finance powerhouse to help achieve net-zero,” committee chair Mel Stride said.