Three European financial supervisory authorities (ESAs) have launched a call for evidence on greenwashing, inviting all kinds of stakeholders to tell them about the practice which undermines the effectiveness of using the financial sector to foster environmental improvement.

EBA, EIOPA and ESMA, which need the information for their own work around sustainable investment, said in a statement yesterday that the call was “to gather input from stakeholders on how to understand the key features, drivers and risks associated with greenwashing and to collect examples of potential greenwashing practices”.

“Due to the growing demand for sustainability-related products and the rapidly evolving regulatory regimes and sustainability-related product offerings, the call is also motivated by the need to better understand which areas may become more prone to greenwashing risks,” the watchdogs said.

They said they were also after input on potential greenwashing practices relevant to various segments of the sustainable investment value chain, as well as to the financial product lifecycle.

“In the context of this call, the term ’greenwashing’ is broadly used, recognising that sustainability-related claims can be linked to all aspects of the ESG spectrum,” the ESAs said.

All interested parties were welcome to contribute to the survey, they said, mentioning financial institutions under the three ESAs, retail investors, consumers’ associations, NGOs and academia as examples of potential respondents.

The three ESAs said the call for evidence was being issued in the context of mandates handed to them from the European Commission in May 2022.

In those instructions, the Commission asked the ESAs for a progress and final report on several aspects related to greenwashing and related risks as well as the implementation, supervision and enforcement of sustainable finance policies.

To inform that report writing, the Commission suggested – among other things – that the authorities contacted competent authorities and market players to gather evidence.

The deadline for comments on greenwashing to the ESAs is a minute to midnight on 10 January 2023.

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Rachel is IPE's Nordic correspondent. She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere. In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile

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