ASIC continues action on misleading claims
Up until the 30 June 2024, ASIC has issued 47 regulatory interventions that were aimed at deterring greenwashing and has commenced two Federal Court proceedings and over $123,000 in notices. The major of interventions addressed by ASIC are outlined in Report 791 ASIC’s interventions on greenwashing misconduct: 2023–2024 (REP 791).
ASIC’s Proceedings
The report also outlines the recommendations and findings as well as examples gathered from 1 April 2023 to 30 June 2024. The interventions during this time consisted of:
37 corrective disclosure outcomes,
issuing eight infringement which amounted to $123,000, and
commencing civil penalty proceedings.
ASIC’s civil penalty proceedings were against heavy weights LGSS Pty Limited (Active Super) (24-121MR) and Vanguard Investments Australia (24-061MR).
ASIC Commissioner Kate O’Rourke has stated that minimising greenwashing is important to maintaining confidence in sustainable products and services.
What do ASIC’s interventions consist of?
The report also outlines the recommendations and findings as well as examples gathered from 1 April 2023 to 30 June 2024. The interventions during this time consisted of:
37 corrective disclosure outcomes,
issuing eight infringement which amounted to $123,000, and
commencing civil penalty proceedings.
ASIC’s civil penalty proceedings were against heavy weights LGSS Pty Limited (Active Super) (24-121MR) and Vanguard Investments Australia (24-061MR).
ASIC Commissioner Kate O’Rourke has stated that minimising greenwashing is important to maintaining confidence in sustainable products and services. He has stated that:
“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.
Where we’ve identified greenwashing misconduct, ASIC has intervened to protect investors and consumers, and to maintain market integrity.”
In terms of ASIC’s regulatory activities, ASIC’s regulatory interventions related to:
disclosures which did not meet the requirements of ESG,
inconsistencies of disclosed ESG investment, and
sustainability claims which have no reasonable basis.
ASIC’s pragmatic approach on greenwashing
ASIC’s greenwashing activities consist of surveillance and have been spanned various sectors such as listed companies, broad funds and the market generally.
ASIC’s Commissioner Ms O’Rourke has noted:
“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”.
ASIC is aware that there are still significant challenges which remain such as the proposals to introduce climate-related financial disclosures particularly for large institutions. The Bill is still awaiting assent and will be available on ASIC’s website once this occurs.
ASIC is encouraging of companies to consider the findings and recommendations available in Information Sheet 271 How to avoid greenwashing when offering or promoting sustainability-related products (INFO 271) and Report 763 ASIC’s recent greenwashing interventions (REP 763).
ASIC is mindful of the fact that a pragmatic approach to enforcement, and will engage with the community to create guidance, ensure legal obligations and preclude misleading and deceptive conduct.
Image obtained from LSJ Online.
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