Investment manager

ASIC probes super fund and investment manager greenwashing

ASIC Chairman Joe Longo said the market regulator is currently investigating several listed companies, super funds and managed funds for possible greenwashing.

“It was only last week that we issued our first sanction for greenwashing, and we are currently investigating a number of publicly listed entities, super funds and managed funds in relation to their alleged green credentials,” said Longo in a speech at the annual ASIC Forum.

Last week, ASIC filed its first greenwashing action against ASX-listed energy company Tlou Energy.

Tlou paid a total of $53,280 to comply with four infringement notices issued by ASIC over concerns about allegedly false or misleading sustainability-related statements made to the ASX in October 2021.

Longo noted that there is strong investor demand for climate-related disclosure to help investors make capital allocation decisions, and ASIC’s task is to “ensure that it there is integrity, trust and confidence in the products, services and disclosure practices related to sustainable finance”.

“About 80% of global GDP is now covered by a net zero target. The Australian Parliament has legislated a 43% emissions reduction target by 2030,” Longo said. “Achieving these goals will require huge investments, which will be channeled through the markets and ASIC-regulated entities.”

Longo said central banks are now “suggesting that climate policy should be combined with fiscal and monetary policy, as the third pillar of macro-economic policy.”

ASIC’s strategy has three features – enforce existing laws, including identifying greenwashing targets for enforcement action; contribute to the proposal for reform and direction of national law, “informed by our engagement with international and national stakeholders”, and plan for the future “by further developing ASIC’s medium and long-term strategic approach in this space and by strengthening our own capacities”.

“How businesses, consumers and regulators around the world respond to these issues will continue to evolve over time,” Longo said. “We too must remain ready to react and adapt.”

Earlier in the year, ASIC released Fact Sheet 271, which focused on greenwashing and improving ESG disclosure practices in listed entities, managed funds and pensions.

The fact sheet is the result of a review that ASIC conducted in the wealth management industry. Once issued, ASIC signaled that it would take enforcement action in the event of “egregious misconduct”.