The Australian regulatory body has conducted investigations into over 100 firms to expose greenwashing practices in managed funds. The watchdog has cautioned that it intends to increase its monitoring of this matter.

A report released indicated that the Australian Securities and Investments Commission (ASIC) initiated its initial legal proceeding this year against Mercer Superannuation Australia, a pension fund. Additionally, ASIC imposed 11 infringement notices and agreed upon 23 corrective actions during the nine months ending in March.

According to the report, ASIC evaluated the disclosure statements of 122 funds and scrutinised investment procedures, advertising, websites, and misconduct grievances to determine whether terms like "carbon neutral," "clean," or "green" were being misleadingly utilised.

"Our interventions are focused on creating equitable and clear markets so that retail investors and financial consumers have accurate information and are not deceived by the 'green credentials' of investments and listed companies," stated Karen Chester, Deputy Chair of ASIC.

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ASIC has affirmed that they are currently conducting ongoing surveillance and multiple investigations, and they expect additional regulatory measures to be taken. There is a growing regulatory focus globally on corporations that make assertions about investments marketed with environmental, social, and governance credentials.

This is especially important for investors who rely on these assertions to achieve net-zero targets. In the UK, warnings have been issued that funds must improve ESG-related data reporting, and officials at the European Securities & Markets Authority have also recognised a "very widespread" threat of money managers engaging in greenwashing, according to Executive Director Natasha Cazenave, speaking on Tuesday.

The Securities and Exchange Commission in the US has also proposed more stringent regulations. In 2020, Goldman Sachs Group settled with regulators for $4 million to resolve allegations that its asset-management division had not sufficiently considered ESG factors in certain investment products.

ASIC's recent actions include issuing infringement notices to Vanguard, accusing them of making misleading statements about funds that exclude companies linked to tobacco sales. Tlou Energy also received an infringement notice for claiming that it would produce carbon-neutral electricity.

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Source: The West Australian