ASIC Crackdown on Greenwashing

The crackdown on ‘greenwashing’, ‘greenhushing’, ‘stewardship washing’, and other forms of misleading labeling and reporting is intensifying.

‘Greenwashing’ is the practice of misrepresenting the extent to which something is environmentally friendly, sustainable or ethical.

The Australian Securities and Investments Commission (ASIC) has initiated 17 civil penalty proceedings against instances of greenwashing, resulting in fines totaling over $230,000.

Responsible investors must ensure that their products accurately reflect their labels to avoid accusations of greenwashing, ASIC Chair Joe Longo stated at the Responsible Investment Association Australasia (RIAA) Conference held in Sydney this week.

It is important for businesses to ensure that they have transparent and clearly defined sustainability objectives, coupled with genuine ambition and tangible actions, to avoid being targeted in ASIC’s greenwashing enforcement efforts.

The Australian Competition and Consumer Commission (ACCC) has drafted guidance for businesses seeking to make environmental and sustainability claims. This guidance consists of 8 key principles that can be followed to avoid greenwashing risk.

Principle 1:

Make accurate and truthful claims

Principle 2:

Have evidence to back up your claims

Principle 3:

Do not hide or omit information

Principle 4:

Explain any conditions or qualifications on your claims

Principle 5:

Avoid broad unqualified claims

Principle 6:

Use clear and easy to understand language

Principle 7:

Visual elements should not give the wrong impression

Principle 8:

Be direct and open about your sustainability transition