Investors welcome Govt’s Sustainable Finance Roadmap

The Federal Government has declared its intention to develop consistent labelling for sustainable investment products as part of its Sustainable Finance Roadmap but has backed the Australian Securities and Investments Commission (ASIC) to continue its crack-down on greenwashing.

Releasing the Sustainable Finance Roadmap, the Government said that Treasury was starting work to develop a new labelling regime which will be open to public consultation early next year.

The Treasurer, Jim Chalmers, released the roadmap just a day after Federal Opposition leader, Peter Dutton, revealed the Coalition’s nuclear energy approach.

“The Government has committed to establish consistent labels and disclosure requirements for investment products marketed as ‘sustainable’ or similar, including for managed funds and within the superannuation system,” the announcement said.

“Such a regime will support product issuers as well as investors, given the increasing demand for investment products with specific sustainability objectives.”

However, it made clear that ASIC would be continuing its focus on targeting greenwashing misconduct in 2024-25 through ongoing surveillance activity and, where appropriate, enforcement action.

The Government’s approach has been welcomed by the Financial Services Council which said that it would provide greater confidence and certainty for investors managing climate-related investment risks and opportunities for bringing sustainability-related investment products to market.

FSC chief executive, Blake Briggs said the investment community had an important role in assisting Australia’s transition towards a net zero carbon economy “and we support the Government’s sustainability goals”.

“The Government’s commitment to establish consistent labels and disclosure requirements for investment products marketed as sustainable will help to address regulatory uncertainty.

“It will benefit consumers and combat greenwashing by providing common understanding about sustainability-related terms and labels.

“It will also enable investment product issuers to more confidently meet the growing demand of Australians to invest in line with their sustainability and ethical values by bringing more sustainability-themed products to market, encouraging increased flows to sustainable investments,” Briggs said.