In an effort to improve the quality of information available to investors in the global energy transition, Australian regulators are taking a series of anti-greenwashing enforcement actions — and they promise there are more to come.
In a report released Friday, the Australian Securities and Investments Commission (ASIC) details the action it has taken to address greenwashing misconduct in the 15-month period ending June 30.
During that period, the regulator said it undertook 47 interventions aimed at “stamping out misleading and deceptive conduct in relation to sustainable finance-related products and services.”
Among other things, the regulator targeted insufficient disclosure on the scope of ESG investment screens and investment methodologies; funds holding investments that are inconsistent with their investment policies; and exaggerated sustainability claims.
The regulator’s actions in response to these issues have included ordering firms to correct their disclosures, issuing enforcement notices and launching civil proceedings.
Various firms have been the targets of these efforts too, ASIC said, including investment funds, pension funds, listed companies and the green bond market.
“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,” said Kate O’Rourke, ASIC commissioner, in a release issued Friday.
“Where we’ve identified greenwashing misconduct, ASIC has intervened to protect investors and consumers, and to maintain market integrity.”
Looking ahead, ASIC said it’s currently investigating other cases of suspected greenwashing and that further enforcement action in this area is expected.
“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,” O’Rourke said.
ASIC also noted that the regulatory environment in this area is expected to evolve, with legislation imposing mandatory climate-related financial disclosure requirements on large companies and financial institutions having received legislative approval and now awaiting royal assent.
“ASIC will take a pragmatic and proportionate approach to the supervision and enforcement of this new regime,” the regulator said, adding that it plans to work with industry to develop guidance for complying with these new disclosure obligations once they take effect.
“While the landscape for sustainability-related disclosures in Australia is undergoing significant change, we remain focused on supporting market integrity,” it added.