ASIC cracks down on greenwashing


ASIC has continued its crackdown on greenwashing, having recently fined two more entities over alleged false or misleading statements.

Earlier this month, ASIC announced they fined superannuation trustee Diversa Trustees $13,320.

Diversa is the issuer of superannuation product Cruelty Free Super. Cruelty Free Super is a sub-fund of the Tidswell Master Superannuation Plan.

asic cracks down on greenwashing esg

The regulator says it was concerned that statements on the Cruelty Free Super website "may have been false or misleading by overstating exclusions, otherwise known as investment screens. In these statements, [Cruelty Free Super] claimed to prevent investment in companies involved in 'polluting and carbon intensive activities', 'financing or support of activities which cause environmental and social harm' and 'poor corporate governance'."

ASIC says that while Cruelty Free Super applied some investment screens, they were "more specific and implemented on a more limited basis than [Cruelty Free Super]'s website had suggested."

"ASIC had concerns that the statements made regarding [Cruelty Free Super] were too broad, potentially misleading consumers as to the extent of the investment screening being implemented," says ASIC deputy chair Sarah Court.

"As consumers increasingly look to more sustainable and ethical investing, including via their superannuation, ASIC wants to make sure funds have the evidence to back their claims and are not promising exclusions that they can't guarantee."

ASIC has also announced that listed energy company Black Mountain Energy Limited (BME) has paid $39,960 to comply with three infringement notices issued by ASIC in relation to concerns about alleged false or misleading sustainability-related statements made to the Australian Securities Exchange (ASX) between December 23, 2021, and September 8, 2022.

The regulator called BME out over statements in three ASX announcements made which claimed that "BME was creating a natural gas development project with 'net-zero carbon emissions'," and "the greenhouse gas emissions associated with Project Valhalla would be net zero."

ASIC was concerned that BME either did not have a reasonable basis to make the representations, or that the representations were factually incorrect.

BME paid the infringement notices on January 3, 2023. Payment of an infringement notice is not an admission of guilt or liability, ASIC noted.

"ASIC issued eight infringement notices for alleged greenwashing in 2022 and has started the year with further action against a listed company," Court says.

"ASIC will continue to closely monitor sustainability claims and take action where we consider representations cannot be substantiated or are factually incorrect."

This article first appeared on FS Sustainability

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Rachel Alembakis is the Managing Editor of FS Sustainability, a Rainmaker title that examines how investors and companies integrate environmental, social and corporate governance issues into their decision-making processes. She has more than a decade's experience covering investment issues for a range of publications in Australia and overseas. Rachel hosts the ESG podcast, The Greener Way.
Davis Go
February 2, 2023 8.31pm

$50k fine is laughable, why even bother,

Money magazine
February 6, 2023 9.01am

Hi Davis,

We addressed that very topic in a column here:

- Money team