The Australian Securities and Investments Commission (ASIC) has pledged to take action against companies that make misleading or unfounded claims about their environmental credentials, as reported by Reuters on November 21. The agency will focus on unsubstantiated net-zero statements and the misuse of environmentally friendly terminology, such as “carbon neutral,” “clean,” or “green”, according to ASIC Deputy Chair Sarah Court at the regulator’s annual forum. She also stated that, while the ASIC will not check whether investment products met environmental targets exactly, it expects companies making net-zero pledges to provide clear and actionable plans for achieving those goals. Additionally, the regulator vows to hold investment distribution platforms accountable for the products they offer.

The ASIC has prioritized greenwashing as a key enforcement area for next year. This year, the agency has filed three lawsuits against two pension funds and a personal finance platform for making unfounded environmental claims. In August, the regulator sued pension fund Active Super, which marketed itself as a responsible investment leader, for making misleading representations. The USD8.8bn pension fund allegedly held 28 investments that exposed members to securities it claimed to restrict. The ASIC is committed to disclosing how and why it intervened with green claims inconsistent with companies’ environmental credentials, intending to guide market participants on avoiding greenwashing. During the nine months ending in March 2023, ASIC issued 11 infringement notices and secured 23 corrective disclosure outcomes after reviewing disclosure statements from 122 funds.

Sources:

https://www.reuters.com/sustainability/sustainable-finance-reporting/australian-corporate-regulator-unveils-new-enforcement-priorities-2024-2023-11-21/

https://www.lexology.com/library/detail.aspx?g=ca6f2a64-7892-4d2f-a139-ce529ae59dab

https://www.bloomberg.com/news/articles/2023-05-10/watchdog-probes-more-than-100-australian-firms-on-greenwashing#xj4y7vzkg