Greenwashing in the EU Financial Sector |
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Greece |
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(Europe)
Firm
Zepos & Yannopoulos
Contributors Updated 1 June 2023 |
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| Does your jurisdiction have an explicit legal framework to identify, address and sanction greenwashing in the financial sector? If yes, is it enacted in a specialized law or addressed by other regulations (advertising law, consumer protection law,... | Greece does not have an explicit legal framework to identify, address and sanction greenwashing in the financial sector. However, entities of the financial sector with more than 500 employees have an obligation under article 151 of Greek law 4548/2018 (Greek Corporate Law), transposing article 19a of Directive 2013/34/EU as amended by Directive 2014/95/EU (NFRD), to disclose in their annual management report (which must be published along with the annual financial statements on the Greek General Commercial Register) a non-financial statement containing information to the extent necessary for an understanding of the undertakings’ development, performance, position and impact of their activities in relation to, as minimum, environmental, social and labor issues, human rights and anti-corruption and bribery matters. Administrative and criminal sanctions of article 177 par.5 of the Greek Corporate Law are threatened against the members of the board of directors (BoD) of such companies in case they have intentionally included inaccurate or incomplete information in such report. Greenwashing may fall under the aforementioned provisions in case it qualifies as a misstatement in the relevant BoD report. Other provisions of capital markets legislation (such as Regulation (EU) 596/2014 on market abuse (MAR)) regarding the disclosure of inaccurate non-financial information which may mislead the investors may also apply with respect to entities that have their securities listed on the Athens Exchange. Sanctions threatened for violation of the MAR may be therefore relevant. Investment firms, fund management companies and insurance companies have also the duty to provide their clients with accurate, clear and not misleading information. Although there are no specific provisions or guidelines regarding greenwashing, greenwashing may lead to the imposition of administrative sanctions in case such entities are considered to have infringed their respective obligations. Entities of the financial sector have also disclosure obligations on non-financial information under (i) Regulation (EU) 2020/852 (Taxonomy Regulation) pursuant to which entities of the financial sector must include in their non-financial statement information how and to what extent their activities are associated with economic activities that qualify as environmentally sustainable (under the Taxonomy Regulation) and (ii) Regulation (EU) 2019/2088, as amended and in force (Sustainable Finance Disclosures Regulation (SFDR)). Although no sanctions are threatened in case of disclosure of inaccurate/misleading information, civil liability under the provisions of Greek Civil Law (GCC art. 914 et seq.) may be established in case clients or investors suffer damages due to such misleading statements. Liability towards consumers specifically may be established under the provisions of Greek Law 2251/1994 as amended and in force (the Greek Consumer Protection Law) implemented in Greece 2011/83/EU Directive (as amended and in force) on consumer rights. The Greek Consumer Protection Law prohibits unfair commercial practices and a breach of the relevant Greek Consumer Protection Law provisions may lead to the imposition of administrative and/or criminal sanctions. Finally, a new law on climate change has been very recently enacted (Greek law 4936/2022) which imposes the obligation, amongst others, on entities of the financial sector (such as credit institutions) to publish annual reports for their carbon footprints of the previous year. Although Greek law 4936/2022 does not specifically address greenwashing, it imposes on such entities the obligation to appoint an independent expert to verify their disclosures on carbon emissions. Such obligation implicitly addresses the risk of greenwashing. |
| Is the relevant legal framework based on the EU or on the national legislation? | As mentioned above there is no explicit legal framework. |
| Is greenwashing, which may occur in the financial sector, addressed specifically and/or any differently from greenwashing in other sectors? | Greenwashing is not addressed specifically for the financial sector or for other sectors. |
| Does the current legal framework provide a definition of greenwashing? If yes, how it is defined, is the definition regulatory-binding? | There is no general definition of greenwashing under Greek law. |
| What are the main challenges legal experts see in addressing greenwashing in the EU financial/banking sector and what are the main challenges in implementing the existing regulatory framework to address greenwashing within the EU financial/banking... | The main challenge is the lack of harmonized rules and a common approach by the various supervisory authorities for detecting and sanctioning greenwashing. |
| Are there any relevant links to national legislation and/or guidance? | Not applicable. |
Greenwashing in the EU Financial Sector
Greece does not have an explicit legal framework to identify, address and sanction greenwashing in the financial sector. However, entities of the financial sector with more than 500 employees have an obligation under article 151 of Greek law 4548/2018 (Greek Corporate Law), transposing article 19a of Directive 2013/34/EU as amended by Directive 2014/95/EU (NFRD), to disclose in their annual management report (which must be published along with the annual financial statements on the Greek General Commercial Register) a non-financial statement containing information to the extent necessary for an understanding of the undertakings’ development, performance, position and impact of their activities in relation to, as minimum, environmental, social and labor issues, human rights and anti-corruption and bribery matters. Administrative and criminal sanctions of article 177 par.5 of the Greek Corporate Law are threatened against the members of the board of directors (BoD) of such companies in case they have intentionally included inaccurate or incomplete information in such report. Greenwashing may fall under the aforementioned provisions in case it qualifies as a misstatement in the relevant BoD report.
Other provisions of capital markets legislation (such as Regulation (EU) 596/2014 on market abuse (MAR)) regarding the disclosure of inaccurate non-financial information which may mislead the investors may also apply with respect to entities that have their securities listed on the Athens Exchange. Sanctions threatened for violation of the MAR may be therefore relevant.
Investment firms, fund management companies and insurance companies have also the duty to provide their clients with accurate, clear and not misleading information. Although there are no specific provisions or guidelines regarding greenwashing, greenwashing may lead to the imposition of administrative sanctions in case such entities are considered to have infringed their respective obligations.
Entities of the financial sector have also disclosure obligations on non-financial information under (i) Regulation (EU) 2020/852 (Taxonomy Regulation) pursuant to which entities of the financial sector must include in their non-financial statement information how and to what extent their activities are associated with economic activities that qualify as environmentally sustainable (under the Taxonomy Regulation) and (ii) Regulation (EU) 2019/2088, as amended and in force (Sustainable Finance Disclosures Regulation (SFDR)).
Although no sanctions are threatened in case of disclosure of inaccurate/misleading information, civil liability under the provisions of Greek Civil Law (GCC art. 914 et seq.) may be established in case clients or investors suffer damages due to such misleading statements. Liability towards consumers specifically may be established under the provisions of Greek Law 2251/1994 as amended and in force (the Greek Consumer Protection Law) implemented in Greece 2011/83/EU Directive (as amended and in force) on consumer rights. The Greek Consumer Protection Law prohibits unfair commercial practices and a breach of the relevant Greek Consumer Protection Law provisions may lead to the imposition of administrative and/or criminal sanctions.
Finally, a new law on climate change has been very recently enacted (Greek law 4936/2022) which imposes the obligation, amongst others, on entities of the financial sector (such as credit institutions) to publish annual reports for their carbon footprints of the previous year. Although Greek law 4936/2022 does not specifically address greenwashing, it imposes on such entities the obligation to appoint an independent expert to verify their disclosures on carbon emissions. Such obligation implicitly addresses the risk of greenwashing.
As mentioned above there is no explicit legal framework.
Greenwashing is not addressed specifically for the financial sector or for other sectors.
There is no general definition of greenwashing under Greek law.
The main challenge is the lack of harmonized rules and a common approach by the various supervisory authorities for detecting and sanctioning greenwashing.
Not applicable.