Guideline 2: Manufacturers’ internal control functions

2.1 The manufacturer should ensure that product oversight and governance arrangements are an integral part of its governance arrangements, including the internal control frame-work as referred to in the EBA Guidelines on Internal Governance under Article 74 of the CRD, where applicable. To that end, the manufacturer’s management body should en-dorse the establishment of the arrangements and subsequent reviews.

2.1a The manufacturer’s management body should put in place sound processes to identify, and prevent greenwashing practices and to manage and monitor risks resulting from greenwashing or perceived greenwashing practices, as also set out in the existing green-washing-risk related requirements in the EBA Guidelines on the Management of ESG risks, where products with ESG features are offered or sold to consumers.

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2.2 Senior management, with support from representatives of the manufacturer’s compli-ance and risk management functions, should be responsible for continued internal com-pliance with the product oversight and governance arrangements. They should periodi-cally check that the product oversight and governance arrangements are still appropri-ate and continue to meet the objectives as set out in Guideline 1.1 above, and should propose to the management body that the arrangements be amended if this is no longer the case.

2.3 The responsibilities for the oversight of this process by the Risk Management function and the Compliance function should be integrated into their perimeter and normal line of du-ties as outlined in the EBA Guidelines on Internal Governance under Article 74 of the CRD, where applicable.

2.4 Senior management should ensure that staff involved in designing a product are familiar with and follow the manufacturer’s product oversight and governance arrangement; are competent and appropriately trained; and understand and are familiar with the product’s features, characteristics and risks, including, where applicable, those related to products with ESG features.

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