Expect no-let up in greenwashing action: ASIC
The Australian Securities and Investments Commission (ASIC) is unlikely to slow its pace on greenwashing enforcement, according to deputy chair Karen Chester.
Speaking at the Responsible Investment Association of Australasia (RIAA) conference, Chester was asked by a delegate whether ASIC was pushing too hard on the matter of greenwashing.
“The question is suggesting we hit the pause button until all the policies are in place and that is just untenable.
“Firstly, greenwashing harm is happening here and now and we have a job to do. Secondly, our prioritization of sustainable finance and the investment task ahead. That’s required for decarbonisation and to respond to climate change and greenwashing is a corrosive agent for that.
“For us to just not act would be inconsistent with us making sustainable finance a priority. We will be out of step with other regulators if we stopped and paused. The first thing that happens when a securities regulator gets out of step globally is people that tend to do those sorts of misconduct come to that jurisdiction and we are encouraging to come here and practice greenwashing.”
Between 1 July 2022 and 31 March 2023, ASIC had secured 23 corrective disclosure outcomes, issued 11 infringement notices and commenced its first civil penalty proceeding. This included actions against Vanguard, Mercer Super and Future Super.
Problems identified across the 35 incidents included:
- Net zero statements and targets not having a reasonable basis or being factually incorrect,
- Terms like ‘carbon neutral’, ‘clean’ or ‘green’, not underpinned by reasonable grounds,
- The scope or application of sustainability-related investment screens being either overstated or inconsistently applied, and
- The use of inaccurate labelling or vague terms in sustainability-related funds.
Going forward, Chester described this as the ‘season two’ for the regulator and hoped that clearer transparency would discourage greenwashing from taking place.
The three actions that ASIC was taking were transparency through disclosure, policy-installed ‘bright lines’ to support that disclosure and regulators doing their job and working together to do so.
“We’re going to do more action and the standards bar will be higher and easier for us. And that’s why there’ll be less action for us to some extent because it will be more transparent to see who is greenwashing under those disclosures.”
AUTHOR
Laura Dew
Recommended for you
Magellan has confirmed the new leadership of its active infrastructure ETF once head of investment, Gerald Stack, exits in July.
Vanguard has indicated it is actively trying to meet the demand for international ETFs with its next ETF launches sitting in this space.
Dubious marketing strategies involving financial advisers are among reasons that research house SQM Research has put the private credit space on alert.
New Platinum International portfolio manager Ted Alexander has told its retail and wholesale investors how he plans to improve the $4.4 billion fund's performance while the firm is also exploring new fee structures.
Do you think they will do anything about the "compare thae pair" ads run by the ISA network? These ads were the worst instance of greenwashing of all time. How can you compare the ISA's 4 investment options, 3 of which are high growth allocation and 1 balanced, to other funds investment options focused on retirees with the majority of their investment options being balanced and conservative?