ASIC fines Tlou Energy for greenwashing

The Australian Securities and Investment Commission (ASIC) has proven today that it was serious about its plans to crack down on greenwashing, by fining ASX listed Tlou Energy.

The energy company claims to deliver “cleaner power solutions”, but ASIC found that Tlou made misleading sustainability-related statements to the ASX.

The statements made by the company were in ASX announcements entitled 'Carbon Neutrality' on February 16 2021 and 'Clean Energy For Botswana and Beyond' on 20 October 2021.

Tlou has paid a total fine of $53,280 regarding four infringements issued by ASIC.

ASIC found that Tlou misled consumers by stating that the electricity the company produced would be carbon neutral, that the business had environmental approval and capability to generate solar power in certain quantities, that its gas-to-power project was low emissions, at that clean energy was of equal priority to the business as its gas-to-power projects.

ASIC found the claims to have insufficient evidence, and to be factually incorrect.

The infringements revealed that Tlou had not undertaken substantive modelling or meaningful investigation to prove carbon neutrality.

According to ASIC deputy chair Sarah Court, “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.”

Tlou's ASX announcement this morning referencing the conclusion of ASIC’s investigation stated, “Tlou does not accept that it contravened any provision of the Corporations Act 2001 (Cth) or the Australian Securities and Investments Commission Act 2001 (Cth) but agreed to pay the infringement notices to bring this matter to an end and focus the Company’s resources on development of its power projects. 

"ASIC has advised Tlou that it will not be taking any further enforcement action following its investigation.”

It appears that ASIC is only just getting started when it comes to preventing harm from greenwashing.

“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,” said Court.