Regime 03 · ESG Governance & Greenwashing Risk
An ESG claim is now a legal exposure, not a marketing line.
A net-zero pledge, a "sustainable" label or a responsible-sourcing claim is read by regulators, litigators and investors as a representation that must be substantiated. In the UK, the CMA can now act directly on misleading environmental claims, with penalties of up to 10 per cent of global turnover. The defence is not better wording — it is governance: a claim-substantiation discipline a board can stand behind.
The risk surface
Three pressures converging on the same claim.
Greenwashing risk no longer sits with one regulator. It is the intersection of consumer-protection enforcement, financial-conduct rules and investor due diligence — each able to test the same public statement against the evidence behind it.
Consumer-protection
The CMA's Green Claims Code, now backed by direct DMCC enforcement powers and turnover-based penalties.
Financial-conduct
The FCA anti-greenwashing rule and Sustainability Disclosure Requirements for regulated firms and labelled products.
Investor scrutiny
ISSB IFRS S1 and S2 setting the comparability bar that diligence teams and lenders increasingly apply.
Litigation & activism
NGOs and shareholders testing transition claims through complaints, advertising challenges and the courts.
Who this concerns
Anyone who makes — or signs off — a green claim.
Boards & directors
Ultimately accountable for the truth of the organisation's environmental representations.
Marketing & IR
Teams drafting the claims that create the exposure, often without a substantiation gate.
ESG & sustainability
Functions expected to hold the evidence but rarely given the governance authority to enforce it.
Investor-facing companies
Firms whose transition narrative is tested in capital-raising, diligence and rating processes.
ESG instruments
From a quick risk scan to a board-grade governance system.
Authored legal-risk intelligence — not a generic policy template. Instant download, transparent sterling pricing.
Greenwashing-Risk Checklist
Marketing, investor-relations & ESG teams reviewing public claims.
- Claim-substantiation tests
- Red-flag language register
- UK CMA & FCA prompts
ESG Legal Risk & Board Governance Toolkit
Boards, investors & ESG teams managing greenwashing and claim-substantiation risk.
- ESG governance charter & terms of reference
- Claim-substantiation discipline
- Greenwashing red-flag register
- Investor due-diligence preparation set
An ESG governance template pack and an investor due-diligence pack are also in development for this regime.
From toolkit to mandate
Stress-test your claims before someone else does.
An ESG claims-risk call reviews your highest-exposure public statements against the substantiation a regulator or litigator would demand, and shows where the governance gap sits.