Understanding Anti-Greenwashing Regulations
Interview with Peter Thain, Sustainability Mass Media Communications Manager
In light of the new Anti-Greenwashing Principles FCA CP 22/20, which include sustainable investment labels, disclosure requirements and restrictions on the use of sustainability-related terms, we would like to hear from Peter Thain, who sits in our Group Sustainability team. He will tell us about what benefit the regulation brings to customers and the industry and what we are doing at Aviva about it.
Question 1: Why is the Anti-Greenwashing regulation so important, and what will be the benefit for our customers?
The anti-greenwashing regulation is hugely important. It will enable businesses to communicate their sustainability and environmental initiatives more transparently. It gives customers confidence that they can trust what's being said, which is incredibly important in our industry.
This regulation helps businesses to think about what they are saying and to present information in an accessible and robust manner, steering them away from making unsubstantiated claims. Having a framework allows businesses to understand what they can and cannot say and how to communicate effectively around a complex issue of sustainability. The guidance should do exactly that, to guide. It is about helping everyone to have the conversation transparently. It is not about stopping people or silencing them which can lead to "Green hushing”.
“Green hushing” is where businesses avoid saying anything because they are scared of getting it wrong. However, not discussing a problem does not make it disappear; businesses play a pivotal role in addressing these issues.
Question 2: What is Aviva doing in preparation for the upcoming regulation?
At Aviva, we have implemented several strategic initiatives to ensure we can transparently communicate our sustainability and ESG (Environmental, Social, and Governance) efforts.
Firstly, we have developed ESG-washing guidelines that extend beyond environmental and greenwashing concerns, covered by the regulation, encompassing broader social and governance considerations as well.
These guidelines prevent undermining the credibility of our initiatives. So, we would refrain from using images in reports that do not correspond to our activities or markets. For example, we wouldn’t include a picture of a coral reef in a sustainability report, whilst we are not working on coral reef initiatives or in markets where it is a native habitat as this would be misleading.
Secondly, we've established a review committee consisting of Sustainability experts, second-line risk, legal and finance professionals. This committee assists in evaluating nuanced arguments, adding an extra layer of scrutiny to our communications. Importantly, our goal is not to police or silence claims but to enable our people to make them safely and accurately.
Question 3: What is the role of Anti-Greenwashing in Aviva's sustainability journey?
Reputation is something that takes a long time to build but can be lost quite easily. Customers today are becoming more conscious about our planet and expect businesses to be responsible in return; and to reflect their values.
Avoiding greenwashing isn't just a defensive strategy; it can also be a source of competitive advantage. Demonstrating leadership in sustainability and communicating with authenticity can enhance a company's reputation as a responsible industry leader. At Aviva, we are able to foster valuable partnerships with conservation organisations like WWF as a result of this. Our partnerships might not have been feasible had we faced penalties for greenwashing previously.
It's crucial to recognize that making incorrect sustainability claims often delivers a short-term gain, but at the expense of the longer-term. Embracing a long-term perspective, both in what we communicate and how we act, can yield lasting dividends in our sustainability efforts.
In conclusion, the anti-greenwashing regulation paves the way for organisations to communicate their sustainability efforts accurately, enhance their reputation, and drive positive change. It serves as a significant step toward strengthening trust between businesses and their customers. In our view, this sentiment equally applies to financial adviser businesses and financial product providers.