Investors and corporates are using vague and interchangeable terms in their climate-related disclosures, according to a new greenwashing report by the Australian Securities and Investments Commission (ASIC). The regulator made 47 interventions during the 15 months to June 2024, issuing over A$123,000 (US$82,000) in infringement notices to companies such as Northern Trust Asset Management and Morningstar Investment Management. The report also listed civil penalty proceedings against superannuation fund Active Super trustee LGSS Pty Limited, Vanguard Investments Australia, and Mercer Superannuation. All three were found by the courts to have engaged in greenwashing, with Mercer handed a A$11.3 million penalty. ASIC found inconsistent and interchangeable use of key terms in listed companies’ disclosures, such as ‘net-zero emissions’ and ‘carbon-neutral’. It also noted insufficient disclosure of key inputs, assumptions, and contingencies used for climate-related statements. The regulator said superannuation trustees had used vague terminology when making claims, sometimes providing unsubstantiated representations or missing out detail on investments held. “A small number of superannuation funds held investments in companies that appeared to be breaching their own investment exclusion criteria,” ASIC said. To help regulated entities avoid greenwashing-related misconduct, the commission said they should consider relevant disclosure requirements in the Australian Sustainability Reporting Standards when disclosing climate-related metrics and targets voluntarily. Last week, the Australian Senate passed landmark amendments to the Corporations Act, introducing mandatory climate reporting aligned with the International Sustainability Standards Board’s S2 climate-related disclosures.
