The corporate regulator is keeping a close eye on attempts at greenwashing by investment firms amid warnings from fund managers of a looming, lesser-known issue of “greenGreenwashing – where companies and fund managers misrepresent how ethical or sustainable their operations or investment products are – has been a rising as investor pressure prompts operators to make commitments on their environmental credentials.
Greenwashing has been in the sights of the Australian Securities and Investments Commission since the regulator announced it would start a review into the issue last July. This led to it releasing a Last year, the International Monetary Fund encouraged policymakers to make more climate data available for corporates and investment funds, including better classification systems to help standardise things such as labels and taxonomies across funds.
“I would encourage ASIC and the regulators to really be clear about enforcement and how we avoid recidivism. You have to have a stringent timescale of enforcement for penalties. I think that would drive the market to be a bit more precautionary and cautious about their claims,” she says.