(Reuters) -Australia’s corporate regulator will crack down on companies which make unfounded claims of being environmentally friendly, and also hold investment platforms accountable for distributing products that don’t live up to these claims, its deputy chair said on Tuesday.
The update from the Australian Securities and Investments Commission (ASIC) formalises a pickup in a campaign against what it called “greenwashing”, or efforts to lure investors into products that do not live up their green promises.
ASIC has filed three lawsuits alleging unfounded environmental claims by two pension funds and a personal finance platform, and named so-called greenwashing as one of its priority enforcement areas for 2024.
“Our focus will be on net zero statements and targets made without a reasonable basis, the use of terms like ‘carbon neutral’, ‘clean’ or ‘green’ that are not founded on reasonable grounds,” ASIC Deputy Chair Sarah Court said in a speech at the regulator’s annual forum in Melbourne.
The regulator would not check whether investment products met environmental targets exactly, but “if you want to go to the market and say ‘net zero by 2030’, what we want you to produce for us is, ‘where is the plan?'” she added.,
The regulator would hold investment distribution platforms accountable for the products they sell. That means that platforms must check that they are selling appropriate products to appropriate customers, Court said.
So far, the regulator had issued interim orders to stop the distribution of some 80 investment products which it considered inappropriate.
“For a number of those stop orders, the issuers of the products did step back, they’ve corrected … and they’ve reissued it,” she said.
“But for quite a significant proportion of that 80… they’ve just withdrawn the product. That is an absolute real world impact.”
(Reporting by Byron Kaye in Sydney and Ayushman Ojha; Editing by Subhranshu Sahu and Miral Fahmy)
