The Australian Securities and Investments Commission (ASIC) has put greenwashing in the spotlight, as Chair Joseph Longo said the organisation will crack down on culprits.
In a speech at the Law Council of Australia to the Business Law Section Corporations Committee, Longo outlined ASIC’s focus areas for the next 12 months being accountability and performance, regulatory efficiency and optimal use of technology.
“A fundamental theme, from the commencement of my term, is wanting ASIC to be ambitious and confident in discharging its regulatory and enforcement responsibilities, to serve and advance the public interest,” said Longo.
As part of Longo’s remit is to cover climate risk and sustainability, he highlighted “proactive supervision” as a key priority for the enforcement of governance and transparency standards.
“We want to see continued improvement in climate change governance and disclosure practices; and in particular, those climate-related disclosures by listed companies comply with the law and are decision-useful for investors,” he said.
“We are also focused on preventing harms from ‘greenwashing’, or misleading claims about the extent to which products are environmentally friendly, sustainable, or ethical.”
As organisations continue to set net-zero targets, Longo outlined the need to help the industry comply with its commitments and responsibilities.
ASIC has recently published an information sheet, for superannuation and managed funds to better understand ASIC’s regulations around misleading and deceptive greenwashing practices.
“We will be looking for funds and products that make misleading claims related to sustainability. Where we find wrongdoing, we will not hesitate to use our range of regulatory tools, including enforcement action,” said Longo.
According to ASIC deputy chair Karen Chester, “In our region alone, sustainability-labelled investments have more than doubled between 2019 and 2021. While globally, ESG assets are projected to exceed US$53 trillion by 2025 and represent more than a third of total assets under management.
“Labels or headline statements about a product’s green credentials should not be misleading. Being ‘true to label’ is not a nice-to-have, it’s a regulatory must-have.”
