Several Australian firms have corrected their exaggerated claims regarding environmentally friendly investments and products, called ‘greenwashing’, after the Australian Securities and Investments Commission (ASIC) intervened, the regulator said on Wednesday.
The ASIC said it secured 23 corrective disclosure outcomes and issued 11 infringement notices between July 2022 and March 2023 as part of its investigation into public companies, managed funds and superannuation funds’ claims about their environmental, social and governance (ESG) credentials.
The regulator said it also commenced a civil penalty proceeding against Mercer Superannuation in February and issued infringement notices to Black Mountain Energy Ltd and Tlou Energy Ltd.
The ASIC’s report on its efforts included examples of its interventions in relation to the use of terms such as ‘carbon neutral’, ‘clean’ or ‘green’, net zero targets, fund labels and the scope and application of investment screens.
“We identified instances where financial products or managed funds were not ‘true to label’ – that is, the names of the products or funds included sustainability-related terms that were inconsistent with the funds’ investments or the investment process described,” the ASIC said.
“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,” ASIC Deputy Chair Karen Chester said.
ASIC said the Australian government recently announced an additional A$4.3 million ($2.92 million) in funding for 2023-24 to continue its greenwashing surveillance and enforcement work. ($1 = 1.4743 Australian dollars)
