Australia’s ASIC issues greenwashing warning

Chair Joe Longo acknowledges progress made by Australia's corporates but says issues still abound

Australia’s securities regulator has warned corporates that it has “surveillances and investigations afoot” as it continues its clampdown on greenwashing.

The Australian Securities & Investments Commission (ASIC) chair Joe Longo cited in a speech a report it released last month, detailing how the regulator had secured 23 corrective disclosure outcomes, issued 12 infringement notices and commenced its first civil proceedings earlier this year.

“While I can’t speak to ongoing actions, I can say that we have further surveillances and investigations afoot,” Longo said.

Greenwashing is fast becoming a top priority among Australia’s regulators so much so that the Australian Competition and Consumer Commission listed it as its top enforcement priority for 2022-23.

Longo noted that while Australia’s corporates had taken a number of positive steps to address greenwashing, ASIC had come across four main categories of problematic behaviour that fall under the category of greenwashing.

They are net-zero statements and targets without a reasonable basis or that are factually incorrect; terms like ‘carbon neutral’, ‘clean’ or ‘green’, that are not founded on reasonable grounds; overstatement or inconsistent application of sustainability-related investment screens; and the use of inaccurate labelling or vague terms in sustainability-related funds.

Longo also cautioned corporates from ceasing all voluntary disclosure in an attempt to avoid greenwashing, so-called “greenhushing”, which has become a topical subject following an influential report by South Pole.

“Domestically we’ve observed some commentators and firms saying, in effect, ‘we have such a good ESG policy, but we can’t say anything about it because the regulators won’t let us’. The reality is the critics are right: this kind of response is just another form of greenwashing; an attempt to garner a ‘green halo’ effect without having to do the work,” Longo said.