The work forms part of the commitment made in the Financial Conduct Authority’s (FCA) ESG Strategy and Business Plan to build trust and integrity in ESG-labelled instruments, products and the support ecosystem.

The package will include new measures like investment product sustainability labels and restrictions on how terms like ‘ESG’, ‘green’ or ‘sustainable’ can be used.

There has been growth in the number of investment products marketed as ‘green’ or making wider sustainability claims, the FCA reported. Exaggerated, misleading or unsubstantiated claims about ESG credentials can damage confidence in these products.

The FCA wants to ensure that consumers and firms are able to trust that products have the sustainability characteristics they claim to have.