Financial Services: Environment Protection
The question
To ask the Secretary of State for Housing, Communities and Local Government, if she will issue guidance to local authorities on communicating levels of risk associated with green investment products to consumers; and whether municipal green investment trust products are covered by the Financial Services Compensation Scheme.
Answered by Jim McMahon
Under the current system, councils are free to determine their own investment strategies. In doing so they must, however, have regard to statutory guidance that sets out best practice to ensure decisions are prudent, affordable and sustainable, and comply with their Best Value Duty. Investments should represent value for money and not place tax payers’ money at excessive risk.
If a firm offering an investment product in question was authorised by the Prudential Regulation Authority (PRA) or Financial Conduct Authority (FCA), is no longer solvent and cannot pay for a claim, the FSCS may offer compensation up to a certain limit. The firm must also be undertaking an activity regulated by the PRA or FCA in relation to that investment product.
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