Greenwashing: ASIC's recent actions on this current investing issue

ASIC has taken a range of enforcement action recently to address the issue of 'greenwashing'. Action so far has focused on managed funds and companies raising capital from retail investors. This comes as ASIC Deputy Chair, Karen Chester, has spoken to the Responsible Investment Association Australasia (RIAA) about the impact of greenwashing on market transparency and integrity.

ASIC identifies greenwashing as the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical.

In her speech, Ms Chester noted, "Greenwashing distorts the information that a current or prospective investor might need to make informed investment decisions. In doing so it results in capital misallocation. Greenwashing corrodes investor confidence in the market for sustainability-related financial products and corporate strategies."