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Clifford Chance

Clifford Chance


Greenwashing Litigation in the Financial Sector

12 January 2024

In times of rising demand for 'green investments' on the financial market, the issue of greenwashing has been of increasing relevance for financial institutions. According to the European supervisory authorities (EBA, EIOPA and ESMA), greenwashing describes a marketing practice where sustainability-related statements, declarations, actions or communications do not clearly or fairly reflect the underlying sustainability profile of an entity, a financial product or financial services. The issue of greenwashing is also being critically monitored by German authorities, which is why it is crucial for financial institutions to be aware of the pitfalls and the legal implications.

Against this background, this briefing will (1) highlight the increasing relevance of greenwashing in civil litigation in Germany, (2) provide a brief overview of the latest Sustainable Finance Strategy recently presented by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, "BaFin"), (3) briefly inform about the draft of the so-called Green Claims Directive presented by the European Parliament, which could potentially have far-reaching implications for the compliance systems of financial institutions, and (4) elaborate on potential implications of greenwashing under existing German criminal law (de lege lata).

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