Consultation Paper on Proposed Measures to Counter the Risk of Greenwashing (May 2022)

Summary

This is a consultation paper issued by the Guernsey Financial Services Commission seeking feedback on proposed guidance to counter greenwashing risk in the investment sector. It sets out draft guidance addressing misleading sustainability claims made by Guernsey funds and by businesses licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 2020. As a consultation, the proposals are not yet in force and the Commission is seeking industry input before finalising them.

• Proposal 1 (funds): A new draft Guidance Note under the POI Law would apply to all collective investment schemes authorised or registered under that law, clarifying that existing prospectus disclosure requirements on investment objectives, policy and restrictions extend to ensuring sustainability related claims are not misleading and are capable of being evidenced.
• Proposal 2 (licensees): Draft additional Guidance would be inserted after Rule 5.4.1 of the Licensees (Conduct of Business) Rules and Guidance, 2021, clarifying that existing promotion and advertising requirements (clear, fair, not misleading) extend to sustainability related claims made by POI licensees, requiring disclosure of how sustainable aims are achieved, monitored, measured and reported.
• Timing for funds: The proposed Guidance Note would apply to newly authorised or registered funds from introduction, and to existing funds from the point their prospectus or marketing material is next updated.
• Broader sectors: The Commission also seeks views on whether similar anti-greenwashing policy measures should be extended to other supervised sectors beyond the POI regime, such as insurance.
• Consultation questions: Four specific questions are posed covering the draft Guidance Note, its timing, the proposed licensee guidance, and the relevance of greenwashing risk to other sectors.

The Commission intends to review responses and, subject to feedback, introduce the finalised Guidance Note for funds and the additional guidance for POI licensees during the second half of 2022. No binding obligations currently arise from this paper itself beyond the invitation to respond.

Key obligations

• Respondents wishing to comment must submit feedback via the Commission's Consultation Hub (or otherwise) by 4 July 2022.

Applies to

Guernsey authorised or registered collective investment schemes (funds), Licensees under the Protection of Investors (Bailiwick of Guernsey) Law, 2020, Investment firms promoting or advertising Controlled Investments

Deadlines

• 4 July 2022: Deadline for responses to the Consultation Paper on Proposed Measures to Counter the Risk of Greenwashing.
• second half of 2022: Commission's target period for introducing the finalised Guidance Note for funds and additional guidance for POI licensees, following consideration of consultation responses.