(26 August 2024 – Australia) ASIC is enhancing its focus on financial products and services as mandatory climate reporting for large entities is set to be enforced from 1 January 2025.
ASIC has pledged a “pragmatic and proportionate approach” to enforcing the new regime, stating that their crack down on greenwashing will restore trust. ASIC’s increased detection measures revealed firms are most commonly grappling with issues such as insufficient ESG methodology disclosure, inconsistent holdings and unsubstantiated claims.
In the 15 months to June, ASIC secured 37 disclosure corrections, issued eight infringement notices totalling over A$123,000 and initiated civil penalty proceedings against Active Super and Vanguard Investments Australia.
New climate rules set to be enacted next year require science-based, high-quality, substantiated and comparable reporting across governance, strategy, risk management, and metrics. Firms must disclose current and future climate-related actions and effects, including emissions data, climate risk management, capital deployment, scenario analysis, resilience and transition plans.
“There is ample room for improvement, and we strongly encourage product issuers and their advisers to focus on the quality of disclosures and the data underpinning them. Sustainability-related information, like any other, should be accurate, based on reasonable grounds and be easily understood” commented ASIC Commissioner Kate O’Rourke.
“Investors and consumers are entitled to accurate and reliable information so they can make informed and confident investment decisions. Greenwashing claims mislead investors and consumers and undermines confidence. Where we’ve identified greenwashing misconduct, ASIC has intervened to protect investors and consumers, and to maintain market integrity.”