ASIC reviews greenwashing in ESG funds

ASIC ESG Joe Longo Australian Institute of Company Directors

4 March 2022
| By Laura Dew |
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The Australian Securities and Investments Commission (ASIC) is conducting a review into ‘greenwashing’ of funds in the environmental, social and governance (ESG) space.  

ESG funds in Australia held over $3 billion in assets under management, according to Calastone, most of which was in active Australian equity ESG funds. 

Speaking to the Australian Institute of Company Directors, ASIC chair Joe Longo, said the regulator was reviewing the promotion of funds which claimed to be offering ESG alignment. 

Greenwashing was described as a form of marketing deceptively used to make funds or products seem more green they actually were. 

Longo said: “ASIC is conducting a review to establish whether the practice and promotion of managed investment and superannuation funds that offer ESG or ‘green’ products are actually aligned.  

“Boards should be mindful that prohibitions in the Corporations Act on misleading and deceptive conduct, and false and misleading statements, apply in relation to financial products such as securities and interests in funds. 

“Accordingly, we encourage boards to look out for any greenwashing- and to ask whether their company’s disclosure around environmental risks and opportunities, or their promotion of ESG-focused products, accurately reflects their practices in this area.” 

 

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