UK Government Appoints New Task Force To Tackle Greenwashing In Financial Sector
The UK government will launch a new independent body to guide ministers, officials, and businesses on how to address greenwashing within the finance industry.
Members of trade bodies, academia, and NGOs will make up the task force, known as the Green Technical Advisory Group (GTAG). The GTAF will be responsible for overseeing the government’s delivery of a “Green Taxonomy”. This common framework will offer comprehensible standards that lay out when a financial product or investment can be classed as environmentally sustainable.
In recent years, green financial products have surged in demand, but this has also given rise to greenwashing within the financial sector. There are concerns that some green financial products fail to deliver their promises of environmental sustainability. These concerns are only exacerbated further by increased cases of allegedly green investment funds that are later found to support carbon-intensive businesses.
The government’s proposed Green Taxonomy aims to stamp out greenwashing within the sector while simultaneously making it easier for consumers and investors to understand the impact that a particular company or product is having on the environment.
Ian Bradbury, CTO for Financial Services at Fujitsu UK & Ireland commented: “As financial organisations strive to provide great customer experiences, the emphasis must also be on how they align their services with customers’ ethical and social beliefs. What’s more, it’s an opportunity to position the business as a trusted pillar of society; empty promises on CSR are no longer enough. This is something Natwest recently demonstrated with its ‘green mortgage’, offering individuals who purchase an energy efficient property a preferential interest rate on their home loan.”
“Undoubtedly, environmental concerns resonate with large proportions of consumers who continue to champion climate change. IBM recently found that 90% of consumers feel that the COVID-19 pandemic affected their views on environmental sustainability. Now, the financial services industry needs to take these concerns as a serious priority,” Bradbury said.