Australian Super Funds are on alert for misleading claims about their ethics and sustainability, which do not stand up to scrutiny.
Australians are increasingly considering how to make better ethical and sustainable decisions with their finances, and while companies are happy to make a profit, not all are living up to their promises.
The Australian Securities and Investment Commission (ASIC) on Tuesday released a guide for businesses to make sure their claims are not an “green wash” or tarnish their environmental, sustainable or ethical credentials.
ASIC Vice President Karen Chester said managed funds and super funds that respond to investor sustainability demand had a responsibility to deliver.
“Being‘ faithful to the label ’is not pleasant to have, it is an essential regulator; it is also essential for the confidence and trust of investors, “said Chester.
Retirement and other managed funds are now more than ever trying to attract business by promising not to invest in industries that contribute to climate change or otherwise harm the environment.
In Australia and New Zealand, investments with the sustainability label have more than doubled between 2019 and 2021, while globally, ESG assets are expected to account for more than a third of total assets managed for 2025.
In response, the ASIC has published a list of guidelines to help issuers avoid “green washing” when offering sustainability-related products.
“Our fact sheet is simply to help issuers comply with their existing regulatory obligations. Holders’ labels or statements about a product’s eco-friendly credentials should not be misleading,” Chester said.
“Transparency and trust are paramount as the market for these products continues to grow and grow.”
ASIC Commissioner Sean Hughes encouraged investors to be wary of vague and ambiguous language or exaggerated marketing claims that seem inconsistent.