The European Union's banking, securities and insurance watchdogs launched a joint public consultation on Tuesday to help them better understand 'greenwashing' as billions of euros flow into investments that tout their sustainability credentials.
Greenwashing refers to companies or products exaggerating their sustainability claims to attract investors and the bloc is already rolling out mandatory disclosures for asset managers and companies.
"Growing demand for sustainability-related products combined with rapidly evolving regulatory regimes and sustainability-related product offerings create a context that may be conducive to increased greenwashing risks," the watchdogs said in a joint statement.
Regulators typically issue a call for evidence before writing new rules.
The three watchdogs are expected to issue final recommendations by the end of May 2024 to the EU's executive body, the European Commission, which has powers to propose laws.
The watchdogs said they were looking for greenwashing across the whole environment, social and governance (ESG) spectrum in relation to companies, products and services.