ASIC Releases Some Additional Guidance On Greenwashing

Much of the recent media commentary on greenwashing has revolved around enforcement action taken by ASIC against entities who have misled investors or shareholders. However, there has been less discussion on best practices for entities looking to avoid greenwashing.

In ASIC's recently released Report 791, ASIC provided entities with some recommendations and good practice examples in order to avoid potential instances of greenwashing. These examples include the following:

• For entities who are voluntarily disclosing their climate-related metrics, ASIC suggests that they consider the disclosure requirements set out in the Australian Sustainability Reporting Standards.

• ASIC recommends that entities verify investments for consistency against disclosed investment strategies. Entities should ensure that sufficient steps are taken to confirm that investments made are verified as being consistent with the claims made about the funds' investment strategy, in order