Investments: Environmental, Social and Governance Criteria

Baroness Sheehan Excerpts

Wednesday 2nd March 2022 Lords Chamber

[Baroness Penn (Con)]

Yes, I agree with the noble Baroness on that point. I think the approach that the UK has taken to date to this whole area meets that test and will continue to do so.

[Baroness Sheehan (LD)]

The director of the think tank InfluenceMap said about the same FT article to which the noble Baroness, Lady Bennett, referred, that if you label something that invests in fossil fuels “sustainable”, and there is a whole body of scientific opinion that new gas, oil and coal production is incompatible with net-zero targets, there is probably quite a good chance that the fund is being mis-sold in some way. Does the Minister agree that a legal definition of greenwashing is urgently needed to prevent mis-selling of financial products?

[Baroness Penn (Con)]

My Lords, I do not think we will be taking quite that approach to a legal definition of greenwashing. We will, through the green taxonomy, provide a clear way by which firms are transparent and what counts towards their sustainability claims, accompanied by regulation from the FCA on the consumer-facing label, but we will also look at whether firms that provide ESG data and ratings should be included in regulation.