The UK began a push to define what constitutes sustainable investing in a bid to clamp down on so-called greenwashing.

A new panel — the Green Technical Advisory Group — will oversee delivery of a “Green Taxonomy” to define the requirements for financial investments to be deemed environmentally sustainable, the Treasury said Wednesday. The aim is to help prevent greenwashing, or “unsubstantiated or exaggerated claims that an investment is environmentally friendly,” it said.

Prime Minister Boris Johnson’s government has put the fight against climate change at the top of its domestic agenda, as well as the centrepiece of its presidency of the Group of Seven major industrialised economies this year. Ministers are also trying to spur companies into action, to help achieve a national goal to eliminate net greenhouse gas emissions by 2050.

“It’s crucial we have a clear common definition of what green means,” economic secretary to the Treasury John Glen said in a statement. “A UK green taxonomy will provide better data on the environmental impact of firms, supporting investors, businesses and consumers.”

It will also make it easier for investors and consumers to understand how a company is affecting the environment, according to the Treasury.

With hundreds of new sustainable investment funds coming to the market and sales to retail investors tripling last year from a year earlier, people need to be able to make “more informed” decisions, it said.

The new panel will be chaired by the Green Finance Institute and will include representatives from business as well as academics, and representatives from non-governmental organisations including the Environment Agency and the Committee on Climate Change.

By Alex Morales