ASIC Gives Update and Warning on Greenwashing Fight

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC) has released a report detailing the 35 interventions it has made in response to its greenwashing surveillance activities from 1 July 2022 to 31 March 2023.

The report also identifies the increasing levels of representations on environmental, social and governance (ESG) credentials by listed companies, managed funds and superannuation funds.

ASIC Deputy Chair Karen Chester said: “this report discloses ‘how and why’ ASIC has taken action against greenwashing. All 35 interventions follow the release of our ‘How to avoid greenwashing’ information sheet in June last year.”

“Where we have seen potentially misleading disclosures, we have taken regulatory action. 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,” said Chester.

From 1 July 2022 to 31 March 2023, ASIC intervention resulted in:

  • 23 corrective disclosure outcomes

  • 11 infringement notices issued, and

  • in one case, the commencement of civil penalty proceedings.

‘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 added. 

The report also provides timely transparency to the market on the nature of the matters where ASIC has intervened, with reference to:

  • net zero statements and targets

  • use of terms such as ‘carbon neutral’, ‘clean’ or ‘green’

  • fund labels, and

  • scope and application of investment exclusions and screens.

When preparing disclosures, ASIC says issuers and advisers are encouraged to consider this report to ensure that sustainability-related disclosures have reasonable grounds and comply with the law.

#greenwashing #green credentials