Australian watchdog made 35 greenwashing interventions over past 9 months

ASIC interventions resulted in alterations to disclosures and fund naming as regulator says it will step up surveillance of green bond market.

Australian financial regulator ASIC made 35 interventions over potentially misleading marketing or greenwashing between July 2022 and the end of March this year, it has revealed.

In a report published on Wednesday, the regulator set out what issues it had identified across corporate and fund disclosures and the corrective or punitive actions that had resulted.

ASIC published a factsheet in June 2022 that aimed to help issuers avoid greenwashing when offering or promoting sustainability-related products. Since then interventions by the regulator have resulted in changes to disclosures in 21 product factsheets across 14 investors, as well as the alteration of one fund name.

When factoring in actions taken against listed companies, the regulator said it had achieved 23 “corrective disclosure outcomes”, issued 11 infringement notices and commenced one civil penalty proceeding.

While the infringement notices and civil proceedings had previously been publicised, the report gives more detail on previously unreported interventions over fund disclosures.

In one instance, the manager of a fund deleted references to transition from its name after ASIC raised concerns that investments were not consistent with it. Another fund altered disclosures to explain how its investment process aligned with its name, having not previously done so, while two other funds explained in greater detail in disclosures how they excluded companies or incorporated ESG considerations.

ASIC also gives details of the actions it has taken on sustainability claims by listed companies. Examples given mainly covered mining firms, with one company removing terms including “low carbon” and “responsibly sourced” from disclosures, its prospectus and investor presentations. ASIC said that the company “did not appear to have a reasonable basis for making these claims, given the early stage of its project”.

The report was released to coincide with a speech by ASIC deputy chair Karen Chester at the Responsible Investment Association Australasia’s annual conference.

Chester described recent regulatory developments, including the development of a sustainable finance taxonomy and a consultation on mandatory climate disclosures as “a broad antidote” to greenwashing.

She said that in the long term, intervening on a case-by-case basis is neither cost effective nor comprehensive, and so the regulator is in favour of policy measures that will support increased transparency and trust.

The regulator identified greenwashing as one of its enforcement priorities for 2023 and Chester said it would be “progressing” its surveillance of the superannuation fund and wholesale green bond market alongside continuing its work on managed fund and corporate sectors.