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ASIC chair slams ‘greenhushing’

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By Charbel Kadib
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3 minute read

The chair of the corporate regulator has urged firms to boldly disclose climate-related activities without fear of stakeholder backlash, claiming “keeping your head down” is a “failure to disclose”.

Appearing on a panel hosted by the Australian Banking Association, chair of the Australian Securities and Investments Commission (ASIC) Joe Longo addressed “emerging” issues related to “greenhushing” — opting not to disclose climate goals to avoid public scrutiny.

“I’m with the group that says, disclose, talk about what you’re doing,” he told an audience on a panel alongside Reserve Bank deputy governor Michele Bullock, and chair of the Australian Prudential Regulation Authority, John Lonsdale.

“I think greenhushing is not a good thing to the extent it exists.

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“…It’s a failure to engage and by keeping your head down for that reason, you’re not really engaging with consumers, investors, and the economy.”

Just a day earlier, Mr Longo told the AFR ESG Summit that firms opting to withhold information about their climate goals may also be engaging in “greenwashing”.

“Domestically, we’ve observed some commentators and firms saying, in effect, ‘We have such a good ESG policy, but we can’t say anything about it because the regulators won’t let us’,” he said.

“The reality is the critics are right: this kind of response is just another form of greenwashing; an attempt to garner a ‘green halo’ effect without having to do the work.”

Mr Longo said ASIC’s work to define disclosure obligations amid the emergence of these activities is “the biggest change in a generation”.

“Across superannuation insurance, and every form of investment activity and consumer activity, there’s a real issue about greenwashing [and] we don’t want consumers and investors misled,” he said.

The ASIC chair made specific reference to disclosure risks associated with capital raises.

“We are a net importer of capital, so if we expect people to invest in Australia, and our companies, there needs to be a consistent taxonomy — a consistent approach to disclosure.

“The stakes are really, really high.”

He acknowledged the “scale of the complexity of this transition is huge”, noting while larger firms had been preparing to assume new disclosure obligations, the broader community needed to “upskill”.

“There’s an upskilling issue within our economy, among accountants [and] lawyers — upskilling everyone who has to apply these standards,” he said.

“There’s a massive education and facilitation aspect to that and then there’s a question of scalability.”

“In the end, this is something I really want to stress, the expectation of governance in Australia is just going to keep going up.”

However, ASIC has already commenced enforcement action against firms suspected of greenwashing.

Just last month, the corporate regulator issued Future Super with an infringement notice as part of its ongoing action against alleged greenwashing.

The regulator said it was concerned that a Facebook post published by Future Super in 2019 may have been false or misleading by overstating the positive environmental impact of the fund.

This Facebook post included the statement: ”Naysayers don’t join together to move nearly $400 million out of fossil fuels”.

According to ASIC, Future Super had approximately $400 million in total funds under management at the time of the post and had no basis to represent that the entirety of those funds had been invested in fossil fuels prior to being invested in the fund.

ASIC chair slams ‘greenhushing’

The chair of the corporate regulator has urged firms to boldly disclose climate-related activities without fear of stakeholder backlash, claiming “keeping your head down” is a “failure to disclose”.

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