FRANKFURT/PARIS (dpa-AFX) - Europe's supervisory authorities are joining forces to combat the increasing whitewashing of supposedly "green" financial products. Banks, insurers and other financial market players have a responsibility to provide sustainability information that is "fair, clear and not misleading", the banking regulator EBA, the insurance regulator Eiopa and the securities regulator ESMA emphasized on Tuesday on the occasion of the publication of their latest analyses on so-called greenwashing in the financial sector.

The EU Commission wants to channel more money into "green" investments in order to accelerate the climate-friendly restructuring of the economy. Bank advisors and insurance brokers must therefore now ask clients about their ideas on sustainability when providing investment advice. Investments should no longer just be about potential returns and risk, but also about the environment, social issues and good corporate governance: the abbreviation ESG (Environmental Social Governance) has become commonplace.

But what is actually sustainable, and where do providers only pretend to be environmentally and climate-friendly? As demand for sustainable investments increases, so does the risk of providers presenting products as "greener" than they actually are. The insurance regulator Eiopa warns: "If greenwashing is not tackled, it could undermine genuine efforts to finance the sustainable transition and weaken consumer confidence in the European insurance and pensions sector."

More and more cases of greenwashing

According to Eiopa, the number of cases in the insurance sector has recently increased: In the current year, the national supervisory authorities of five member states had reported "greenwashing" cases, compared to three in 2023. According to the information, six other national supervisory authorities are currently investigating potential cases.

The EU banking regulator EBA is also observing a growing risk of greenwashing among banks, investment firms and payment service providers. The result of the EBA's quantitative analysis of greenwashing shows a significant increase in this trend in all sectors, including EU banks. The total number of suspected cases in the European Union increased further in 2023: by 26.1 percent compared to 2022, the EBA announced.

The supervisory authorities' analyses of "greenwashing" are part of a broader initiative. In March 2023, the EU Commission presented a legislative proposal that would oblige companies to meet minimum standards when making claims about the climate friendliness or sustainability of their goods, for example. The aim of the Brussels authority is to ensure that anyone who buys a product advertised as environmentally friendly can be sure that the product really is "green." /ben/DP/stw