ASIC warns on folly of ‘green halo effect’

The chair of the Australian Securities and Investments Commission (ASIC), Joe Longo has accused some Australian investment companies of attempting to garner the “green halo effect” – talking about the value of green credentials without actually doing anything.

Amid an ASIC crackdown on “greenwashing”, Longo admitted that some companies had ceased voluntary disclosures and were “chasing greenwashing with a little ‘greenhushing’”.

“Last year, for example, the Swiss carbon finance consultancy, South Pole, released an international report that found nearly a quarter of the 1,200 companies surveyed have decided not to talk about their net-zero commitments at all. South Pole’s report sparked an intense discussion globally, with many condemning the policy of keeping quiet as simply another form of greenwashing,” he said.

“Domestically, we’ve observed some commentators and firms saying, in effect, “we have such a good ESG policy, but we can’t say anything about it because the regulators won’t let us”. The reality is the critics are right: this kind of response is just another form of greenwashing; an attempt to garner a ‘green halo’ effect without having to do the work,” the ASIC chair said.

Longo made clear that ASIC was alive to these strategies and would not hesitate to act, if necessary.

“ASIC’s work on greenwashing also aligns with the Government’s broader sustainable finance agenda. This includes not just mandatory climate disclosure, but also ESG labelling and taxonomy,” he said.

“The agenda is not yet fully enacted, but ASIC will not hesitate to enforce the existing legal obligations as they stand. The prohibition against misleading and deceptive conduct is a longstanding element of those obligations, and this is where our focus on preventing greenwashing falls.”