Many of us are taking small steps to tackle some of the big environmental challenges we face. This might be switching to an energy tariff that utilises solar and wind power, reducing plastic use or ensuring our money is invested sustainably
There are now a whole range of ‘green’ investment products and funds, designed to appeal to the eight of 10 adults who says they would like to see their investments ‘do good’ as well as deliver a financial return.
Until now, it has been difficult for ordinary investors to see whether the underlying investment strategy matches environmental claims, leading to industry concerns around ‘greenwashing’ — a term used to describe misleading advertising or marketing.
The Financial Conduct Authority introduced new a new anti-greenwashing rule from 31 May 2024 to tackle this problem. This sets out new product labels and standardised definitions to help investors better understand how their money is being invested, aiding consumer choice.
Financial companies also now need to evidence relevant marketing claims, whether this is to do with green credentials, sustainability or having a positive impact on the environment or wider society. This should enable regulators to act against firms who say one thing but do another when it comes to environmental and sustainability claims on funds.
As a result, there may be fewer ‘green’ investment products on the market, but investors should have confidence that those remaining are proven sustainable investment options, that do what they say.
Investing in shares should be regarded as a long-term investment and should fit with your overall attitude to risk and financial circumstances.
