There has been an increase in investor demand for, and the availability of, sustainability-related financial products in the Australian market. With this comes a growing risk of greenwashing and, as a result, investors being confused or misled.
It is therefore important that issuers comply with existing requirements when promoting or offering sustainability-related products. Such requirements include the prohibitions against misleading and deceptive statements and conduct, as well as disclosure obligations.
A sustainability-related product is a financial product where the issuer has incorporated considerations such as environmental, social and governance matters into its investment strategies and decision making.
ASIC has provided information for responsible entities of managed funds, corporate directors of corporate collective investment vehicles and trustees of registrable superannuation entities.
It outlines:
what greenwashing is and why it's a concern
the current regulatory setting for communications about sustainability-related products
questions to consider when offering or promoting sustainability-related products.
While this information focuses on sustainability-related products issued by funds, its principles may apply to other entities that offer or promote financial products that take into account sustainability-related consideration.