[ESMA22-106-4551 ] SMSG advice on additional questions relating to greenwashing

The Securities and Markets Stakeholder Group (SMSG) has provided advice to the European Securities and Markets Authority (ESMA) on additional questions relating to greenwashing.
The SMSG recommends that a definition of greenwashing for the financial sector be aligned with definitions used in the broader economy and be linked to existing rules that would be violated by instances of greenwashing. The SMSG proposes a holistic definition of greenwashing as „the practice of misleading investors, notably (but not limited to) in the context of gaining an unfair competitive advantage, by making an unsubstantiated ESG claim about a financial product or service.“ The SMSG advises ESMA to explicitly link the definition of greenwashing to the concrete standards that market participants would violate when engaging in greenwashing. The SMSG has set up a working group to provide further input to ESMA on four additional questions raised in the SMSG’s initial advice, including how to deal with the declining number of „article 9“ funds and whether intent is relevant in the definition of greenwashing.
Please refer to the document for details.