Navigating the Risks of Greenwashing: Key Regulations and Supervisory Measures in Sustainable Finance

Regulation (EU) 2019/2088 " on the disclosure of information related to sustainability in the financial services sector ” imposes requirements on the disclosure of the environmental and social effects of transactions on financial markets when creating financial products for their participants and on financial advisors when providing investments or insurance. consulting for end investors. Such disclosures relate to the integration of sustainability risks, the consideration of adverse sustainability impacts and sustainable investment objectives, or the promotion of environmental or social considerations in investment decision-making and advisory processes. Regulation 2019/2088 aims to prevent greenwashing and increase transparency by a) reducing information asymmetries in the relationships between principal agents regarding the integration of sustainability risks and b) taking into account adverse sustainability impacts and promoting environmental or social characteristics that require financial market participants and financial operators to take into account pre-contractual advisors and ongoing disclosure of information to end investors. (Dimitris Chatzimichael, more at lexology.com)