Australian regulator hits energy company with greenwashing charge

  • Energy firm fined A$53,280 for four infringements

  • Other listed entities under investigation for green claims

Australia’s financial services regulator the Australian Securities and Investments Commission (ASIC) has taken its first action for ‘greenwashing’ against listed energy company Tlou Energy (Tlou).

Tlou has paid a total of A$53,280 to comply with four infringement notices issued by ASIC over concerns about alleged false or misleading sustainability-related statements made to the Australian Securities Exchange (ASX) in October 2021.

The infringement notices were issued in relation to statements and images contained in two ASX announcements made by Tlou which claimed that electricity produced by Tlou would be carbon neutral; Tlou had environmental approval and the capability to generate certain quantities of electricity from solar power; Tlou’s gas-to-power project would be ‘low emissions’; and Tlou was equally concerned with producing ‘clean energy’ through the use of renewable sources as it was with developing its gas-to-power project.

ASIC said it was concerned that Tlou either did not have a reasonable basis to make the representations, or that the representations were factually incorrect.

The regulator has highlighted greenwashing – the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical – and sustainable finance as a key priority.

“As entities promote sustainability and green practices as part of their value proposition, they must ensure they can support those statements and have a reasonable basis for doing so,” said ASIC Deputy Chair Sarah Court.

“ASIC is currently investigating a number of listed entities, super funds and managed funds in relation to their green credentials claims. Companies are on notice that ASIC is actively monitoring the market for potential greenwashing and will take enforcement action, including Court action, for serious breaches,” Court added.

To ensure their communication to shareholders, members and the broader market is accurate and has a reasonable basis, ASIC has published an Information Sheet (INFO 271) for companies and their advisers on how to avoid greenwashing when offering or promoting sustainability-related products or otherwise making sustainability-related claims.

#greenwashing #ASIC

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