In Europe, there is a lack of resources to sanction “greenwashing” according to a report

Three European financial regulatory authorities are calling for more resources to better recognize and sanction cases of “greenwashing”, which are still little detected in Europe due to lack of resources, according to a report published Tuesday.

ESMA (European Securities and Markets Authority), the financial markets authority in Europe, EIOPA (European Insurance and Occupational Pensions Authority) for insurance and the EBA (European Banking Authority) for banks, have published a joint report, at the request of the European Commission, on the supervision of sustainable finance policies and the risks of “greenwashing”.

The three authorities agree to define “greenwashing” as a practice where statements, actions or communications related to sustainability do not clearly and honestly reflect the real impact of a company, financial product or financial services on the environment.

But when it comes to “greenwashing”, the national authorities responsible in Europe for financial matters are still faced with constraints in terms of human resources, access to quality data, but also expertise.

To meet these specific knowledge needs, Esma and the national financial market regulatory authorities in Europe have started to “ strengthen their skills and expertise in sustainability through training programs, recruitment” or “by dialogue with non-governmental organizations (NGOs)”, according to the report.

For the moment, “greenwashing”, although denounced, has given rise to very few sanctions. Only two relevant national regulators in Europe said they had received complaints related to the subject. Another said she had received useful information about potential cases.

The report highlights that most of these reports come from shareholders, NGOs, investors and whistleblowers.

According to information received from 15 national authorities, the low number of complaints can be explained by “the lack of knowledge (…) and awareness of investorsor by the limited size of the sustainable development financing market in certain Member States.

For several national authorities in Europe, the situation arises from a combination of several factors, ranging from difficulties in transposing European legislation to their national legislative frameworks, the absence of a sufficient, clear or explicit mandate for supervisory authorities in matters of greenwashing, or the supervision of advertisements or marketing campaigns relating to notions of sustainability.

Life insurance and PER: three tips to green your savings

source site-96