Australian regulator investigating more firms for ‘greenwashing’

SYDNEY  – Australia’s corporate watchdog is investigating several companies and financial institutions for “greenwashing”, or exaggerated claims regarding environment-friendly investment and products, a senior official said on Tuesday.

The Australian Securities and Investment Commission (ASIC) has been increasing its oversight of climate-related reporting. Last month, it fined an energy firm A$53,280 ($34,600) over statements that the electricity it produced would be carbon-neutral – the regulator’s first such action.

“We have a number of investigations ongoing in relation super funds, managed funds and entities so people should expect some more interesting outcomes,” Joanna Bird, executive director at ASIC’s financial services and wealth group, said at the AFR Super & Wealth Summit in Sydney.

Greenwashing refers to misrepresenting the extent to which an investment or a financial product is environment-friendly and sustainable.

Bird said greenwashing is against the law and organizations making claims about net zero carbon emission targets should check with ASIC’s information on what constitutes greenwashing.

“When you make a claim like that you need to have a reasonable basis for what you are saying,” Bird said.

While companies have improved climate-change reporting in recent few years, a disparity in global reporting standards has left gaps, ASIC has said.