ASIC commits to continue greenwashing crackdown in 2024

The Australian Securities and Investment Commission (ASIC) has confirmed it will continue its crackdown on greenwashing next year, with a focus on advertising claims made by investment and superannuation funds. 

ASIC deputy chair Sarah Court made the commitment at the corporate watchdog's annual conference in Melbourne this week. Court said greenwashing would be a key focus alongside predatory lending, misconduct in the superannuation sector and used car financing.

The renewed commitment aligns with a similar crackdown by the Australian Competition and Consumer Commission (ACCC), which launched a number of investigations earlier this year into businesses that were making "concerning claims" about their environmental credentials. 

ASIC's crackdown this year saw ASIC take Mercer Superannuation to court for allegedly misleading investors in the marketing of its “Sustainable Plus” funds.

The legal action, which was a national first, alleged Mercer's “Sustainable Plus” funds were marketed with claims these funds excluded investments linked to fossil fuels, alcohol production and gambling.

ASIC, however, alleged those products were actually invested in companies with links to those industries, such as AGL Energy, BHP Group, Heineken Holdings and Crown Resorts.

At the time ASIC deputy chair Sarah Court said the legal action was a reflection of the corporate watchdog's "continuing efforts to ensure sustainability-related claims made by financial institutions are accurate."

"There is increased demand for sustainability-related financial products, and with that comes the growing risk of misleading marketing and greenwashing. If financial products make sustainable investment claims to investors and potential investors, they need to reflect the true position. If investments in certain industries like fossil fuels are said to be excluded, this promise must be upheld."

The moves by ASIC and ACCC reflect a global trend with regulators and consumers putting pressure on corporates to behave sustainably and responsibly. This year governing bodies in the EU, UK and US have announced crackdowns on misleading and greenwashing claims in advertising.