by Andrea Malcolm
The Australian Securities and Investment Commission (ASIC) has secured 22 corrections, 11 fines and commenced a civil court action, since June last year when it put out information on how to avoid greenwashing. Among companies fined were Tlou Energy, Vanguard Investments Australia, superannuation trustee Diversa Trustees, and Black Mountain Energy..
Greenwashing targeted work also includes a review of 122 fund product disclosure statements, further scrutiny of the investment processes of 17 funds, a surveillance of ESG-related disclosures by companies raising capital from retail investors, and responses to public complaints.
ASIC deputy chair Karen Chester says, “All 35 of our interventions are aimed squarely at promoting fair and transparent markets so that retail investors and financial consumers are well informed and not misled on the ‘green credentials’ of investments and listed companies. We have ongoing surveillances and several investigations underway and anticipate further regulatory action.”
In February the ASIC began benchmark civil court proceedings against Mercer Superannuation Australia alleging misleading marketing of some of its superannuation investment options. ASIC commissioner Danielle Press said the compulsory nature of superannuation meant ASIC was taking a tough stance and was also investigating other retirement funds after public complaints.
In March it fined Vanguard $42,878 for claiming three of its funds excluded tobacco companies, when the funds included companies involved in the sale of tobacco products. Vanguard said the breach was unintended, paid the fine and updated web content and fact sheets.
The same funds were available in New Zealand but the New Zealand regulator, the Financial Markets Authority, does not have the same powers to impose fair dealing fines as the ASIC.
FMA enforcement director Paul Gregory says as the ASIC had already responded on Vanguard, further action would have been disproportionate. The FMA did, however, issue a formal warning to Vanguard for failing to disclose details of the Australian fines in time.
Gregory says the FMA is able to impose fines for breaches around financial reporting, it does not have the regulatory power to impose fines for breaches of the fair dealing provisions. He says it has a range of other tools which are outlined in its 2020 integrated products disclosure framework including stop orders, direction orders and in the most serious cases court action.
The FMA issued stop orders against multi-level marketing company Validus and The One Management GP for its Longhorn property fund, although neither were greenwashing cases.
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