Press release

UK financial regulator opens one climate investigation, lawyer-led FOI reveals

20 June 2024 

The UK financial watchdog has opened its first enforcement investigation into a company over climate-related issues, it has been revealed following months of correspondence between ClientEarth lawyers and the regulator.

In an FOI response to the environmental law organisation, the Financial Conduct Authority (FCA) disclosed that its one active enforcement case was opened in July 2023 – but it did not provide any further information on the type of firm or specify the misconduct it is investigating.

The watchdog had previously refused to reveal what greenwashing or climate cases it was investigating, if any, despite its transparency obligations as a public authority.

ClientEarth challenged this refusal and, after the FCA repeatedly exceeded the FOI timeframes for review, escalated the matter in April this year by filing a complaint to the Information Commissioner – a matter which is still ongoing. [1]

ClientEarth lawyer Megan Clay said: 

“Two years ago, the UK’s financial regulator told ClientEarth that there wasn’t a single climate or environment-related enforcement case on its desk despite the legal tools available – so one active investigation is welcome news.

“However, one case is still too few, and the FCA has suggested that this investigation does not relate to greenwashing. Years of inaction have allowed many firms to issue misleading climate claims, with investors and consumers failing to receive the accurate information they need.

“The good news is that the FCA is now in a strong position to act. A new anti-greenwashing rule took effect just last month, and campaigners have already urged the regulator to investigate climate-related claims by the UK’s biggest high street banks. [2]

“The FCA must take this new opportunity for decisive enforcement to unequivocally let firms know: there are consequences for overblown climate claims.”

UK falling behind on enforcement 

Despite one active enforcement case, the FCA still lags behind other markets. Their US and Australian counterparts have already handed out several fines to financial institutions for breaching existing law.

The Australian Securities & Investments Commission (ASIC) has commenced 3 greenwashing cases against funds: Vanguard, Mercer Superannuation and Active Super– and the US Securities and Exchanges Commission (SEC) has issued multi-million-dollar fines to investment firms such as BNY Mellon for ESG misstatements. [3]

Within the UK, the FCA is also falling behind other regulators when it comes to prosecuting climate claims.

The Advertising Standards Authority (ASA) has banned misleading climate-related ads from both Shell and HSBC, and a Competition and Markets Authority (CMA) investigation into three fashion brands – ASOS, Boohoo and George at ASDA – has led to the companies in question to pledge to use only “accurate and clear” claims earlier this year. [4]


Notes to editors:

[1] ClientEarth’s full press release at the time of filing a complaint to the Information Commissioner in April is available here.

[2] The Make My Money Matter campaign wrote to regulators – including the FCA – in May as a new anti-greenwashing rule came into force and called for them to review sustainability claims and communications from some of the UK’s biggest banks, namely Barclays, HSBC, Santander, Natwest and Lloyds.

The new anti-greenwashing rule introduced on 31 May effectively re-states existing FCA rules regarding clear, fair and not misleading statements.

[3] Please see “Australian regulator steps up greenwashing crackdown”, 7 January 2024 as reported by the Financial Times; and “SEC Fines BNY Mellon over ESG in first case of its kind”, 23 May 2022 as reported by the Financial Times and “The SEC’s War Against Greenwashing and ESG Misuse Has Begun”, 15 June 2022 as reported by Bloomberg.

[4] The ASA banned Shell’s adverts over misleading climate-related claims in June 2023 and had previously banned HSBC’s climate-related ads in October 2022. The CMA said in March 2024 that ASOS, Boohoo and George ASDA pledged to only use “accurate and clear” claims following action from the regulator.


Correspondence between ClientEarth and the FCA regarding the FOI request:

  • 29 Sep 2023 – ClientEarth sends FOI request to FCA
  • 10 Nov – After reply from FCA, ClientEarth submits refined FOI request
  • 08 Dec – Deadline passes for FCA FOI Response, as set out by the ICO (20 working days from refined request)
  • 11 Dec – Late FOI response from FCA, refusing to disclose (among other things) the number and type of enforcement greenwashing/climate cases because it would “be likely to prejudice the exercise by the FCA of its regulatory functions under FSMA” (relying on section 31 FOIA 2000, which is a qualified exemption and must therefore be weighed against public interest)
  • 04 Jan 2024 – ClientEarth sends FOI appeal to the FCA, asking for internal review and challenging grounds of refusal. Acknowledged by the FCA.
  • 28 Mar – After multiple holding responses from the FCA, 60 days passes without a substantive reply to ClientEarth’s FOI appeal, (three times the ICO’s recommended time for response, with no explanation for delay)
  • 02 Apr - ICO complaint submitted by ClientEarth
  • 10 Jun – FCA responds to ClientEarth’s FOI appeal
About ClientEarth

ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.