Primarily based on the allegations made by ASIC, Mercer was a big goal, and one which the regulator presumably believed would act as a powerful warning to others.
ASIC alleges Mercer made statements on its web site about seven “Sustainable Plus” funding choices provided by the Mercer Tremendous Belief, of which Mercer is the trustee. It marketed the Sustainable Plus choices as appropriate for members who “are deeply dedicated to sustainability” as a result of they excluded investments in firms concerned in carbon intensive fossil fuels equivalent to thermal coal and firms concerned in alcohol manufacturing and playing.
As customers or traders we’re too usually trusting of the claims made and/or unable to confirm them.
However these sustainable funds had investments in Australia’s greatest emitter, AGL, pure-play coal firm Whitehaven, and assets giants BHP and Glencore. There have been 15 firms within the portfolio that produced alcohol, together with Treasury Wine Estates, Budweiser and Heineken, and 19 firms concerned in playing together with Crown, Tabcorp and Aristocrat.
Till this week, ASIC had issued $140,000 of infringement notices to fund managers and companies for greenwashing.
This quantity is tiny within the scheme of issues and displays that ASIC has belatedly included greenwashing as certainly one of its priorities.
ASIC chairman Joe Longo mentioned it had lengthy supported voluntary disclosures on climate-related disclosure however was now a convert to the necessity for mandated climate-related reporting.
The ACCC, which has been on the greenwashing bandwagon for longer, nominated a number of industries the place considerations have been recognized – together with cosmetics, meals and packaging, automobiles and power.
The competitors regulator’s “sweep” of firms recognized quite a lot of points round greenwashing that included obscure or unqualified claims, an absence of substantiating data and the usage of absolute phrases equivalent to “100 per cent plastic-free”, “constructed from 100 per cent recycled content material” or “zero emissions”.
The ACCC is worried companies could also be exaggerating the sustainability advantages of their merchandise or omitting damaging attributes.
For instance: a enterprise selling its investments in renewable power initiatives, however nonetheless sourcing most of its merchandise from fossil-fuel based mostly industries.
Or what concerning the enterprise asserting a product is recyclable or compostable when there isn’t any system in place to gather it.
And watch out for the enterprise that claims offsetting its carbon emissions has a “constructive” impression on the setting but it surely hasn’t taken steps to scale back its total emissions.
There have been additionally specific claims made about compliance with environmental laws.
However how does the buyer wade via a complicated array of promotional materials and weasel phrases to search out the reality? They’ll’t.
That’s a job for the competitors and company cops.
So in terms of ESG it’s purchaser beware.
The Enterprise Briefing publication delivers main tales, unique protection and professional opinion. Signal as much as get it each weekday morning.