Australian companies could end up in court if they mislead consumers and investors about going green, the corporate cop has warned.
Greenwashing is very much in our sights, Australian Securities and Investments Commission Chair Joe Longo told a business summit on Thursday.
He urged boards to ask whether their disclosure around environmental risks and opportunities, or their promotion of green products, accurately reflected their business operations.
ASIC has a review underway to establish whether the practice and promotion of managed investment and superannuation funds that are tagged as "ESG" or "green" is backed up.
"The definition we use to describe greenwashing is the potential for an entity to over-represent the extent to which its practices are environmentally friendly, sustainable, or ethical," Mr Longo said.
Boards should be mindful that prohibitions in the Corporations Act do apply, he said.
Business Council Australia president Tim Reed said companies should be honest about the lack of commercially viable technology to get to net zero emissions by 2050.
Companies and state governments are taking the lead on halving Australia's emissions this decade, but the remainder will be difficult to achieve, he said.
Setting out ASIC's priorities for 2022, the watchdog also plans to work with other regulators, industry and social media platforms to combat and disrupt financial scams and address any deceptive promotion of "riskier asset classes" such as cryptocurrency.
Protecting financially vulnerable consumers impacted by predatory lending practices or high-cost credit are also on the radar.
