ASIC levy will fund greenwashing initiatives
The Government has used the Budget to making a commitment towards green bonds and to counter greenwashing with some of the cost to be funded via the ASIC levy.
The Budget papers revealed the Government will provide $14.2 million over 4 years from 2023–24 to support its sustainable finance agenda, including:
- $8.3 million over 4 years from 2023–24 (and $1.3 million per year ongoing) to establish a sovereign green bond program to raise capital for environmental and climate change related programs
- $4.3 million in 2023–24 for the Australian Securities and Investments Commission (ASIC) to ensure the integrity of sustainable finance markets by investigating and undertaking enforcement action against market participants engaging in greenwashing and other sustainable finance misconduct
- $1.6 million in 2023–24 to support the initial development of a sustainable finance taxonomy for classifying economic activities according to their impact on sustainability goals.
The Budget papers said funding for ASIC activities will be cost recovered through levies under ASIC’s funding model with partial funding for this measure will be held in the Contingency Reserve.
The budget revealed more public servants, less consultants. I believe that’s a good thing. But I wonder how it will impact on ASIC, who essentially are feeding some of the consultancy industry when they undertake reviews of activities in the financial advice industry. Will ASIC now actually be employing investigators, particularly investigators with knowledge of the industry they are investigating, not just lawyers looking for a quick head on a plate.
There is a stack of retired advisers out there who could really give ASIC an insight into what’s actually going on, not what the consultants feel ASIC needs to hear. It’s now common knowledge that one of the methodologies used under ASIC supervision was to send consultants, at outrageous hourly rates, into an advice practice, with instructions to examine 20 advice files. The deal was that if just one file was found to contain a breach, then another 20 files would be allocated, and so on. Guess what: some how or other are rather the 19th or 20th always contained some evidence of a breach, significant or otherwise. The game carried on and in some cases is still ongoing and it didn’t matter if the files were more than 10 years old and the rules had changed since the date of the advice.
And now I hear my ASIC levy is to fund ASIC investigation of “green washing” by some fund managers. Gee thanks!