Stars

Shop with eco-friendly cleaning solutions!

Shop here

forward-icon-2

US Regulator Homes In On Malpractice In Voluntary Carbon Markets

By Virginia Furness

May 21, 2024 at 10:00:00 AM

FILE PHOTO: Signage is seen outside of the US Commodity Futures Trading Commission (CFTC) in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kell/File Photo

FILE PHOTO: Signage is seen outside of the US Commodity Futures Trading Commission (CFTC) in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kell/File Photo

By Virginia Furness

LONDON (Reuters) - The Commodity Futures Trading Commission (CFTC) is investigating greenwashing as part of its crackdown on fraud and misconduct in the voluntary carbon markets, a commissioner at the U.S. regulator said on Monday.

The probe into false claims about the environmental benefits of carbon credits, as well as the green credentials of financial products, comes as CFTC homes in on its first set of federal guidelines for voluntary carbon credits derivatives.

Regulators are looking to introduce standards and curb manipulation in a market that has operated without federal oversight.

The CFTC is investigating the activities under its Environmental Fraud Task Force which it introduced in June 2023 to tackle fraud and manipulation in carbon credit markets and other forms of greenwashing, such as misrepresentations about environmental, social and corporate governance (ESG) investment strategies.

"The idea is to weed out the bad actors that could impact the derivatives market, we would do that with any commodity," said CFTC commissioner Christy Goldsmith Romero told Reuters on the sidelines of a conference in London.

Goldsmith Romero said the watchdog had not yet brought a case but said that several activities were under "active investigation."

In June, the CFTC said it was seeking tips from whistleblowers on potential violations of Commodity Exchange Act (CEA) connected to fraud in carbon markets.

The Securities and Exchange Commission, often seen as the CFTC's sister agency, has also been cracking down on funds greenwashing.

Having closed its public consultation in February, the CFTC aims to have these guidelines finalised by the end of 2024, Goldsmith Romero said.

The U.S. watchdog has taken guidance from the Integrity Council for Voluntary Carbon's (ICVCM) markets Core Carbon Principles, an industry initiative tasked with raising standards in the voluntary carbon markets.

The CFTC has regulatory authority over carbon credit derivatives traded on its exchanges, as well as anti-fraud authority over the underlying credit which gives it an interest in spot voluntary carbon markets.

(Reporting by Virginia Furness in London; Editing by Marguerita Choy)

Share News
Reuters
Reuters

News Agency

Reuters is a news agency owned by Thomson Reuters Corporation. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide. Reuters is one of the largest news agencies in the world.

Related Products

Categories

Popular Articles

A father and son standing on a desolate, rocky landscape with a distant, hazy horizon.
Climate Fiction: The Genre For Our Time

Arts & Literature

Aug 17, 2024

Latest Infobites
5th
4th
3rd
2nd

Share your ideas

with others