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The UK Government has launched an independent expert group to tackle ‘greenwashing’ and support consumers and investors make green financial decisions.
The Green Taxonomy Advisory Group (GTAG) has been appointed, as of 9th June 2021, to support green financial decisions by reducing the use of greenwashing across all industries. The independent group will oversee the framework to set standards for investments that can be defined as environmentally sustainable. This is also known as the ‘Green Taxonomy’.
Greenwashing is used as a marketing promotion tool that makes exaggerated, deceptive or misinformed claims of being an environmentally friendly or sustainable business. Businesses make these claims by fabricating product descriptions, businesses aims or policies. This provides a positive but false public image.
The use of greenwashing among deceptive businesses has become more and more popular with the push for a net-zero future. Consumers and investors are more considerate about contributing to our sustainable future and greenwashing provides the competitive edge for these businesses. These claims will have an impact on the consumer or investor as the business is at risk of being caught and permanently ruining its reputation.
As discussed in our earlier post Are Green Claims Being Misused? we covered the recent implementation of environment claims to the CMA’s (Competition and Market Authority) annual search for fraudulent conduct online. This enabled them to tackle claims using the customer protection legislation and provided customer awareness by providing transparency to these claims.
The GTAG will now be the pushing force to ensure consumers and investors of all sizes can make informed decisions by ensuring transparency to businesses environmental friendly and sustainable claims. This will further boost our progress to net-zero goals by ensuring investments are put towards genuine projects that support net-zero and increase the economy by creating job opportunities.
The group will be built with stakeholders, data experts and subject experts that are chaired by the Green Finance Institute. Together, they will provide non-binding advice to the Government to deliver and develop the green taxonomy framework. They will also work alongside other, newly formed, groups when required such as the Energy Working Group that will provide advice on green technologies and the approach to nuclear power.
Executive Director of Green Finance Institute, Ingrid Holmes, said:
“The GTAG will play a key role, advising Government on implementing a robust, science-based Taxonomy that is adapted to the specific needs of the UK context and works for all stakeholders. We’re delighted to chair the GTAG, and to welcome all 18 members on board, all of whom have a demonstrable interest and/or track record of being engaged in the issue of developing and using taxonomies, and the practicality of applying a taxonomy in a UK-specific context.”