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Climate Impact and Greenwashing
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The Australian Securities and Investments Commission(ASIC) Deputy Chair Karen Chester said sustainable finance is a 'whole of ASIC' activity.
The Deputy Chair highlighted that disclosures and prohibitions against false and misleading disclosures are essential to work that is being done related to climate change-related disclosures and greenwashing.
Climate change-related disclosures were the main agenda item for International Sustainability Standards Board (ISSB) last week.
The Australian government has hinted at legislated enhanced transparency and for the moment the ASIC encourages companies to follow the Task Force on Climate-related Financial Disclosures.
“The inevitable bottom line is that there is going to be increased transparency through disclosure on climate-related risks and opportunities – including transition plans and decarbonisation pathways. Importantly, this will be the price of access to global capital markets.”
Greenwashing
Chester also spoke to the regulator’s attention to greenwashing:
We have a number of investigations underway in relation to allegations of greenwashing. The kinds of things that we're looking at involve potential misleading or deceptive conduct by various listed entities, super fund trustees and managed fund responsible entities. They relate to things like net zero target statements and investment exclusions and screening for sustainability-related financial products.
This speech comes the same week that the regulator announced taking action against Tlou Energy Limited as its first action against a listed company for greenwashing.
Deputy Chair Sarah Court said in an official statement, “As entities promote sustainability and green practices as part of their value proposition, they must ensure they can support those statements and have a reasonable basis for doing so.”
This action comes just months after publishing how their guide for avoiding greenwashing.
ASIC was not satisfied with several claims made by the listed company:
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electricity produced by Tlou Energy Limited would be carbon neutral;
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Tlou had environmental approval and the capability to generate certain quantities of electricity from solar power:
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Tlou’s gas-to-power project would be ‘low emissions’; and
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Tlou was equally concerned with producing ‘clean energy’ through the use of renewable sources as it was with developing its gas-to-power project.
The energy company has paid over $53, 000 to comply with their infringement notices.
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