ASIC continues its action against misleading claims to deter greenwashing misconduct with 47 regulatory interventions between 1 April 2023 and 30 June 2024.

ASIC’s regulatory interventions related to:

1. Insufficient disclosure on the scope of ESG investment screens and investment methodologies
2. Underlying investments being inconsistent with disclosed ESG investment screens and investment policies, and
3. Sustainability-related claims without reasonable grounds or without sufficient detail.

ASIC’s surveillance activities covered a number of sectors, including listed companies, managed funds, superannuation funds and the wholesale green bond market.

Report 791 provides examples of corrective actions taken by entities in response and makes recommendations for companies, responsible entities and superannuation trustees to consider when making disclosure.

ASIC’s key recommendations are that disclosures should be informed by the disclosure requirements set out in the Australian Sustainability Reporting Standards (once published), independent verification of investments to ensure consistency with sustainable investment strategies and adequate explanation of investment exclusions or screening criteria.

Product issuers and their advisers are encouraged to focus on the quality of their disclosures and the underpinning data.

This is particularly important in light of the proposed introduction of mandatory climate-related financial disclosure requirements for large businesses and financial institutions which has been passed by the Senate. The Bill will give the Australian Accounting Standards Board authority to set the legally binding reporting standards outlined above.

ASIC urges entities to consider the findings and recommendations in Report 791 and Information Sheet 271.