ASIC has made 47 regulatory interventions to address greenwashing misconduct during the 15-month period up to 30 June 2024, including the commencement of two Federal Court proceedings and over $123,000 in infringement notice payments.
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.
‘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 LGSS Pty Limited (Active Super) (24-121MR) and Vanguard Investments Australia (24-061MR).
ASIC also progressed the civil penalty proceeding against Mercer Superannuation (Australia) Limited (24-173MR), 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,
- 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.
‘Sustainability-related information, like any other, should be accurate, based on reasonable grounds and be easily understood by investors,’ Ms O’Rourke said.
ASIC urges entities to consider the findings and recommendations in this 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 acknowledges 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. Once it receives Royal Assent, information will be made available on the ASIC website.
ASIC 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.
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.
Background
Greenwashing and sustainable finance are key priorities for ASIC as outlined in our Corporate Plan. ASIC is focusing on supporting market integrity and efficiency through the supervision and enforcement of current governance and disclosure standards to reduce harms from greenwashing, while engaging closely on climate-related financial disclosure requirements.
ASIC’s INFO 271, which was issued in June 2022, sets out a number of questions for financial product issuers to consider when preparing communications and disclosures about sustainability-related products.
Investors and consumers can look at the Moneysmart website to learn more about ESG investing.