The range of interventions, outlined in Report 791 ASIC’s interventions on greenwashing misconduct: 2023–2024 (REP 791), are aimed at stamping out misleading and deceptive conduct in relation to sustainable finance-related products and services.
The report also details findings, recommendations and good practice examples from its surveillance activities from 1 April 2023 to 30 June 2024.
ASIC Commissioner Kate O’Rourke said combating greenwashing is critical to maintaining trust in sustainable finance-related products and services.
“Investors and consumers are entitled to accurate and reliable information so they can make informed and confident investment decisions. Greenwashing claims mislead investors and consumers, and undermines confidence,” the Commissioner said.
“Where we’ve identified greenwashing misconduct, ASIC has intervened to protect investors and consumers, and to maintain market integrity.”
The interventions between 1 April 2023 and 30 June 2024 included obtaining 37 corrective disclosure outcomes by various entities, issuing eight infringement notices adding up to over $123,000, and commencing civil penalty proceedings against Active Super and Vanguard Investments Australia.
ASIC also progressed the civil penalty proceeding against Mercer Superannuation (Australia) Limited, which concluded with an $11.3 million penalty.
ASIC’s regulatory interventions related to insufficient disclosure on the scope of ESG investment screens and investment methodologies.
It also targeted underlying investments that are inconsistent with disclosed ESG investment screens and investment policies, and sustainability-related claims made without reasonable grounds or without sufficient detail.
ASIC’s greenwashing surveillance activities covered a broad range of sectors, including listed companies, managed funds, superannuation funds and the wholesale green bond market.
“Our surveillance indicates there is ample room for improvement and we strongly encourage product issuers and their advisers to focus on the quality of disclosures and the data underpinning them,” the regulator added.
“Sustainability-related information, like any other, should be accurate, based on reasonable grounds and be easily understood by investors.”
ASIC urged organisations to consider the findings and recommendations in the report as well as Information Sheet 271 How to avoid greenwashing when offering or promoting sustainability-related products (INFO 271) and Report 763 ASIC’s recent greenwashing interventions (REP 763) to reduce the risk of greenwashing.
ASIC acknowledged the significant changes ahead with the proposed introduction of mandatory climate-related financial disclosure requirements for large businesses and financial institutions. The Bill proposing this legislation has now passed the Senate.
ASIC said it will take a pragmatic and proportionate approach to the supervision and enforcement of this new regime.
“We will engage closely with industry as we develop appropriate guidance to help it build the capability required to meet the new obligations,” ASIC said.
“Throughout the transition to the proposed mandatory climate reporting regime, ASIC will act to ensure current disclosure and governance standards are maintained and that entities comply with their existing legal obligations, including the longstanding prohibition against misleading and deceptive conduct.”
Investors and consumers can better understand the main elements of ESG investing compliance through the Certificate in Green and Sustainable Finance.
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