The Australian Securities and Investments Commission has published a report disclosing how and why it has taken action against greenwashing, detailing all 35 interventions it has made in response to its greenwashing surveillance activities from July 1, 2022, to March 31, 2023.
Greenwashing, one of ASIC’s enforcement priorities for 2023, has been defined by the corporate watchdog as the “practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable, or ethical.”
The latest ASIC report also identified the increasing levels of representations on environmental, social, and governance credentials by listed companies, managed funds, and superannuation funds.
All 35 ASIC interventions followed the release of the regulator’s “How to avoid greenwashing” information sheet in June last year.
“Where we have seen potentially misleading disclosures, we have taken regulatory action,” said Karen Chester (pictured above), ASIC deputy chair. “Our interventions range from securing timely corrections, issuing public infringement notices through to commencing civil penalty proceedings.
“All 35 of our interventions are aimed squarely at promoting fair and transparent markets so that retail investors and financial consumers are well informed and not misled on the ‘green credentials’ of investments and listed companies. We have ongoing surveillances and several investigations underway and anticipate further regulatory action.”
From July 1, 2022, to March 31, 2023, ASIC intervention resulted in 23 corrective disclosure outcomes, 11 infringement notices issued, and the commencement of civil penalty proceedings in one case.
“In disclosing how and why we intervened, alongside the corrective outcomes of our actions, we hope to further inform the market on how to avoid greenwashing,” Chester said.
The report also detailed the nature of the matters in which ASIC has intervened, with regards to:
- net zero statements and targets
- use of terms such as “carbon neutral,” “clean,” or “green”
- fund labels
- scope and application of investment exclusions and screens
ASIC encouraged issuers and advisers to consider the report, alongside Information Sheet 271, when preparing sustainability-related disclosures to ensure they have reasonable grounds and comply with the law.
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