The UK’s Financial Conduct Authority (FCA) is to host an international operational forum aimed at developing tools to tackle the rise of greenwashing in financial services.
The forum titled ‘TechSprint’ will bring together 13 global regulatory bodies alongside firms and innovators to address the environmental, social, and governance (ESG) and sustainable finance priorities of the Global Financial Innovation Network (GFIN).
Starting on June 5, the event will run for three months, concluding with a showcase day in September. The goal of the TechSprint is to create a tool or solution to help regulators and the market effectively tackle the risks of greenwashing in financial services, helping investors feel confident about their investment decisions and powering the sustainable investment market.
“The number of investment products marketed as ‘green’ or making wider sustainability claims is growing.” said the financial regulator. “Exaggerated, misleading or unsubstantiated claims about Environmental Social and Governance (ESG) credentials damage confidence in these products and the FCA wants to ensure that consumers and firms can trust that products have the sustainability characteristics they claim to have.”
UK-based firms interested in participating in the TechSprint can apply from April 17, with a 4-week application window. Applications are available via the FCA website.
The TechSprint is a part of the FCA’s ongoing efforts to combat financial greenwashing, which has presented significant challenges in the financial industry. The regulator has also proposed a new framework called the Sustainability Disclosure Requirements (SDR).
The SDR seeks to prevent retail investors from being misled by establishing a clear labelling and disclosure framework. The regulator had planned to share details of the proposal in the first half of this year. However, due to the need to assess feedback received during its consultation period, it will now be published in the third quarter instead.
Who is the Global Financial Innovation Network
The Global Financial Innovation Network is a group of financial regulators and organisations that work together to improve the development of financial technology (fintech) innovation and collaboration across international regulatory borders.
GFIN’s goal is to promote knowledge sharing, regulatory practices, and experimentation of emerging technologies and fintech business models, leading to more effective and innovative solutions, ultimately resulting in improved financial services for customers. GFIN has 70 member organisations, including regulatory bodies, central banks, and other international organisations from diverse regions and countries around the world.
