Watchdog investigating businesses over ‘greenwashing’ claims

Several companies and financial institutions are being investigated over ‘greenwashing’ by the Australian Securities and Investment Commission (ASIC), according to a senior official.

The Australian business watchdog has extended its oversight of climate-related reporting and last month took action against an energy company when it fined the business $53,280 for claiming that it produced carbon neutral energy, the Bharat Express News reported.

“We have a number of studies underway regarding super funds, managed funds and entities, so people should expect some more interesting results,” said Joanna Bird, executive director of ASIC’s financial services and wealth group, at the AFR Super & Wealth Summit in Sydney.

The act of greenwashing means misrepresenting the sustainability and environmentally friendliness of a product or investment.

Bird said that any organisations making net carbon emissions target claims should consult ASIC’s information on greenwashing, the Bharat Express reported.

“When you make a claim like that, you have to have a reasonable basis for what you’re saying,” Bird said.

A disparity in global reporting standards has led to gaps, though companies have improved climate change reporting in recent years, according to ASIC.