The Austrian Financial Market Authority (FMA) is warning consumers about “greenwashing” in the latest edition of its consumer information series “Let’s talk about money”. “Greenwashing” means advertising a financial product as being environmentally friendly, green or sustainable, presenting it as being green, although it does not actual fulfil such standards. Potential investments are thereby convinced to commit to investments that they would not have done so had they known the actual impact of the financial product, or would have only done so at another price.<\/p>
“Greenwashing” is in particular conducted by misleading or false statements in publicity, advisory meetings and product information. It is frequently associated with a matching visual design that typically makes use of the colour green and depictions of unspoilt nature. Furthermore, terms like “ecological” and “green” are frequently used for this purpose, a certification featured that doesn’t even exist.<\/p>
“Sustainable investments per se are not more secure than comparable traditional investments. Always make enquiries and be critical,” warn the FMA’s Executive Directors, Helmut Ettl and Eduard Müller. Particular caution is recommended in relation to the “grey capital market”, i.e. the capital market that is not subject to regulation. Investments in “green real estate”, wind farms and solar parks or hydro-electric power are frequently offered. Where such projects are designed as qualified subordinated loans, equity capital, debt securities or participation rights, you should be aware that in the case of the company’s insolvency that all invested invested money may be lost.<\/p>
The FMA Consumer Information team is currently observing a trend with regard to enquiries about the topic of sustainable financial products. Sustainability is also one of the FMA’s priorities for supervision and inspections for 2021.<\/p>