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UK Regulator Raises Concerns over the Sustainability-Linked Loans Market, Including Potential Greenwashing
August 8, 2023On June 29, 2023, the Financial Conduct Authority, the UK’s financial markets regulator, released a summary of its concerns over the market for sustainability-linked loans (SLLs). Responding to concerns that banks overstate the extent to which they participate in green financing or otherwise have a positive ESG impact, in May 2023 the FCA began conducting interviews with banks and borrowers about the transparency of ESG-related loans. Following completion of engagement with stakeholders, the FCA published a letter addressed to the heads of ESG/Sustainable Finance at certain banks and companies, in which it raised concerns regarding SLLs, including potential greenwashing.
