Australian Regulator ASIC Cracks Down on Greenwashing, Issues Warning to Corporates

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To combat greenwashing, Australia’s securities regulator, the Australian Securities & Investments Commission (ASIC), has intensified its efforts with ongoing surveillance and investigations to ensure transparency and accuracy in sustainability-related claims.

ASIC’s proactive approach has yielded positive results, including corrective disclosures, infringement notices, and civil proceedings. This reflects the increasing importance placed on addressing greenwashing by regulators, with the Australian Competition and Consumer Commission listing it as a top enforcement priority for the upcoming year.

ASIC has identified four critical categories of problematic behaviour associated with greenwashing. These include misleading net-zero statements and targets lacking a reasonable basis, unsupported terms like ‘carbon neutral’ or ‘green,’ inconsistent application of sustainability-related investment screens, and inaccurate labelling or vague terms in sustainability-related funds. 

The Australian Securities & Investments Commission (ASIC) chair Joe Longo said in a speech, “While I can’t speak to ongoing actions, I can say that we have further surveillances and investigations afoot.”

By raising awareness of these practices, ASIC aims to ensure that environmental claims made by corporates are accurate and substantiated.

However, ASIC also warns against a phenomenon known as “greenhushing,” where corporates withhold voluntary disclosure to avoid accusations of greenwashing

Such a practice is viewed as another form of dishonest behaviour, as it aims to create an impression of environmental responsibility without taking substantive action.

The regulator emphasises the need for corporates to engage in responsible and transparent practices, discouraging them from using regulatory limitations on disclosure as an excuse for inadequate environmental efforts. By doing so, ASIC aims to foster genuine sustainability initiatives that go beyond mere public relations.

As greenwashing continues to be a pressing concern in the corporate landscape, ASIC’s actions remind businesses about the importance of accurate and substantiated environmental claims. The ongoing surveillance and investigations demonstrate ASIC’s commitment to ensuring corporate accountability in sustainability-related disclosures.

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