The Government has asked a group of experts to set up a guide to what does and does not count as sustainable investment to crack down on companies trying to greenwash their activities.
A new Green Technical Advisory Group, (GTAG) will be chaired by the Green Finance Institute and made up of financial and business stakeholders, taxonomy and data experts, and specialist from academia, NGOs, the Environment Agency and the Committee on Climate Change.
“The green taxonomy will help clamp down on greenwashing – unsubstantiated or exaggerated claims that an investment is environmentally friendly – and make it easier for investors and consumers to understand how a firm is impacting the environment,” the Treasury said.
The independent group’s advice will, however, merely advise ministers’ on decisions and will not be binding.
Hundreds of sustainable investment funds come to market every year, small investors sometimes struggle to make informed decisions, with companies using a raft of different standards which are often difficult to compare.