Watchdog probes more than 100 Australian firms on greenwashing
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The Australian watchdog reviewed disclosure statements from 122 funds and examined complaints for evidence of the misleading use of green terms.
PHOTO: REUTERS
SYDNEY – Australia’s corporate watchdog has investigated more than 100 companies under a drive to flush out greenwashing in the managed funds sector, and warned it plans to step up scrutiny of the issue.
The Australian Securities and Investments Commission (Asic) launched a first legal case in 2023 against pension fund Mercer Superannuation Australia, and issued 11 infringement notices between July 2022 and March 2023 and agreed on 23 corrective actions in the nine months through March, according to a report on Wednesday.
The regulator also said several Australian firms have corrected their exaggerated claims regarding environmentally friendly investments and products after Asic intervened.
Asic reviewed disclosure statements from 122 funds and examined investment processes, advertising, websites and misconduct complaints for evidence of the misleading use of terms including “carbon neutral”, “clean” or “green”, the report said.
“Interventions are aimed squarely at promoting fair and transparent markets so that retail investors and financial consumers are well informed and not misled on the ‘green credentials’ of investments and listed companies,” Asic’s deputy chair Karen Chester said in a statement.
“We have ongoing surveillances and several investigations under way and anticipate further regulatory action.”
Regulators globally are sharpening their focus on companies making claims about investments sold with environmental, social and governance (ESG) credentials, particularly with investors relying on the pledges to meet net zero targets.
Britain has warned funds must improve reporting of ESG-related data, while officials at the European Securities and Markets Authority are also focused on a “very widespread” risk of so-called greenwashing by money managers, executive director Natasha Cazenave said on Tuesday.
In the United States, the Securities and Exchange Commission has also proposed stricter rules.
Goldman Sachs Group in 2022 agreed to pay US$4 million (S$5.3 million) to settle regulators’ claims that its asset-management unit did not properly weigh ESG factors in some investment products.
Asic’s actions since July 2022 include infringement notices against Vanguard Investments Australia in relation to alleged misleading statements about funds excluding companies tied to tobacco sales, and another issued to Tlou Energy over claims that it would produce carbon neutral electricity. BLOOMBERG/REUTERS
