UK Market Watchdog Says Carbon Trading Market Has Credibility Issues
The British capital markets watchdog, the Financial Services Authority, has released a report warning that many emissions trading companies make false claims about their green credentials.
The FSA says that the integrity of the carbon trading market is under threat. The information that carbon emissions traders relay to clients often has a truth content that’s lower than you’d expect. In many cases there’s also no clarity over the regulations involved, a lack of credible data. Investors are also frequently offered climate change related products that are totally unsuitable for their goals.
What’s more, some authorised firms brand themselves as ‘carbon neutral’. “This marketing must be credible, sustained and accurate to avoid jeopardising the firms’ and the market’s reputation,” the FSA stresses. Although the watchdog is not mandated to directly regulate the carbon trading market, the report indicated that “the emissions markets justifiably demand the FSA’s continued attention. […] This type of behaviour undermines confidence in the market.”
The FSA warns that the mismanagement on the carbon emissions trading market could pose a risk to other commodities markets. For an extensive official UK government guide on individual carbon trading rules, click here.