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Greenwashing is now on the radar of Australia’s corporate cop, warning companies against exaggerating green credentials to woo customers and investors with the promise of rapid emissions cuts.
The Australian Securities and Investment Commission (ASIC) said that companies could end up in court if they mislead consumers and investors about going green.
Greenwashing is very much in our sights, ASIC Chair Joe Longo told a business summit back in March.
“The definition we use to describe greenwashing is the potential for an entity to overrepresent the extent to which its practices are environmentally friendly, sustainable, or ethical,” Longo said.
He encouraged boards to ask whether their company’s disclosure around environmental risks and opportunities, or their promotion of green products, accurately reflected their business operations.
“Boards should be mindful that prohibitions in the Corporations Act on misleading and deceptive conduct, and false or misleading statements, apply in relation to financial products such as securities or interests in funds,” he said.
ASIC also announced that it is conducting a review to establish whether the practice and promotion of managed investment and superannuation funds that are tagged as “ESG” or “green” is backed up.
Business Council Australia president Tim Reed said companies should be honest about the lack of commercially viable technology to get to net zero emissions by 2050.
Companies and state governments are taking the lead on halving Australia’s emissions this decade, but the remainder will be difficult to achieve, he said.
As part of its priorities for 2022, ASIC said it will work with other regulators, industry and social media platforms to combat and disrupt financial scams and address any deceptive promotion of “riskier asset classes” such as cryptocurrency.
The corporate cop also said it will also focus on protecting financially vulnerable consumers impacted by predatory lending practices or high-cost credit.
with news from AAP
Zoe is a content creator, specialising in speech and corporate communications. She is currently the content producer of Supply Chain Channel— a learning ecosystem dedicated to connecting and empowering the Australian supply chain community.
