Goodbye greenwashing? Climate disclosures

With the push towards reducing carbon emissions to net zero by 2050, green changes are being made across society. As more investors seek out sustainable funds for their money, the IMF is calling on governments to protect investors from greenwashing, urging regulators to stop financial companies making misleading claims about their environmental credentials.

Going green

Greenwashing, where organisations present an environmentally responsible public image when this isn’t necessarily true, could hinder sustainability efforts, which the IMF is eager to tackle – “Proper regulatory oversight and verification mechanisms are essential to avoid greenwashing.”

The UK government is taking such steps. From April, over 1,300 of the largest UK-registered companies and financial institutions – firms with turnover above £500m and at least 500 employees – will have to disclose climate-related financial information. They will be required to consider the risks and opportunities they face from climate change.

Long-term strategies

Economic Secretary to the Treasury, John Glen, commented, “These requirements will not only help tackle greenwashing but also enable investors and businesses to align their long-term strategies with the UK’s net-zero commitments.”

It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.