Portugal does not have an explicit legal framework to identify, address and sanction greenwashing specifically in the financial sector. However, there are various sectorial provisions and guidelines that may help to prevent greenwashing.

For instance, under the Portuguese Securities Code and the Portuguese Commercial Companies Code (pursuant to the transposition of Directive 2014/95/UE), are large undertakings and simultaneously public-interest entities or public-interest entities which are parent undertakings of a large group, in each case having an average number of employees in excess of 500 on their balance sheet dates, in the case of a group on a consolidated basis, are subject to non-financial performance reporting. Within the scope of such reporting, the in-scope entities are required to include in their management report or in an autonomous report a non-financial statement covering, inter alia, environmental and social matters. In this respect, the CMVM (the Portuguese Securities Market regulator) has developed and published a non-financial information disclosure template that aims to promote completeness and objectivity of non-financial information which is required to be disclosed. However, it should be noted that this template has a non-binding character.

The CMVM has published a circular on the requirements applicable to the disclosure of information by supervised entities, summing up the standards they must comply with and explaining the supervisory approach to be followed, focusing on the reliability, consistency and comparability of the information provided as an essential factor for the credibility of sustainable finance and investor confidence.

In accordance with the Portuguese Securities Code, any information provided to the market and the CMVM in respect of financial instruments, financial intermediation activities, public offerings of securities and issuers, shall be complete, true, updated, clear, objective and lawful. These general requirements might be used to address false, incomplete or misleading sustainability claims made within the scope of the non-financial information disclosure requirements mentioned above or in other sustainability information disclosure materials.

False or misleading ecological claims in the context of marketing and advertising also fall within the Portuguese consumer protection law and may constitute a breach of the Portuguese Advertising Code, as well as a violation of the Decree – Law n.º 57/2008, of 26 March that lays down the legal rules applicable to unfair business-to-consumer commercial practices (transposing Directive 2005/29/CE).

The above-mentioned requirements on non-financial performance reporting derive from the transposition of European legislation to the Portuguese legislation (in particular of Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups). Decree–Law n.º 57/2008, of 26 March that lays down the legal rules applicable to unfair business-to-consumer commercial practices was also enacted pursuant to the transposition of Directive 2005/29/CE of the European Parliament and of the Council of 11 May 2005.

Please see the response to section 1 above. 

The current Portuguese legal framework does not provide a definition of greenwashing.

Lack of a clear definition of what is considered greenwashing: without a common understanding of what constitutes greenwashing, it is difficult for regulators and financial institutions to identify and prevent these practices.

Limited resources of regulators: the resources available to regulators to evaluate the environmental impact of financial products and services, and to monitor and enforce compliance with the regulations, are limited. This can lead to a reduced capacity to investigate and prosecute cases of greenwashing.

Difficulty in assessing the environmental impact of financial products and services: the lack of standardization and different methodologies and standards for measuring environmental impact make it difficult to accurately assess and compare the environmental impact of different products and services.

The complexity of disclosure requirements and lack of consumer awareness: the complexity of information disclosed by financial institutions and the lack of consumer awareness of the issue of greenwashing can make it challenging for consumers to evaluate the environmental claims made by financial institutions and to make informed decisions about the environmental impact of investment products and services.

Portuguese Securities Code: https://dre.pt/dre/legislacao-consolidada/decreto-lei/1999-34575175 

Portuguese Commercial Companies Code: https://dre.pt/dre/legislacao-consolidada/decreto-lei/1986-34443975 

Portuguese Advertising Code: https://dre.pt/dre/legislacao-consolidada/decreto-lei/1990-34537375 

Decree – Law n.º 57/2008, of 26 March: https://dre.pt/dre/legislacao-consolidada/decreto-lei/2008-34454075 

Circular CMVM: https://www.cmvm.pt/pt/Legislacao/Legislacaonacional/Circulares/Pages/circular_20211222.aspx?v=