Written by ASIC has recently taken formal enforcement action against ASX listed energy company Tlou Energy Ltd, for its greenwashing conduct. Greenwashing generally refers to the making of unsubstantiated or misleading representations about the environmental impact or benefits, sustainability or ethics associated with a financial product or investment strategy. ASIC, the ACCC and other regulators are increasingly concerned with greenwashing given investors’ concerns with ESG and preference for investment into products that consider these impacts.
Tlou Energy was ordered to pay $53,280 as a result of four infringement notices issued by ASIC over concerns about alleged misleading or deceptive statements made to the ASX. The Greenwashing conduct included claims and images suggesting that the electricity produced by Tlou would be carbon neutral, that they had environmental approval and the capacity to generate certain quantities of electricity from solar power, that their ‘gas-to-power’ project would be ‘low emissions’ and that they were equally concerned with producing ‘clean energy’ through the use of renewable sources as it was developing its ‘gas-to-power’ project.
ASIC alleged that there was either no reasonable basis for these representations, or that they were factually incorrect. These were representations were found to be in contravention of s 12DB(1)(a) of the Australian Securities and Investments Commission Act 2001 (Cth). This case demonstrates that regulators are taking greenwashing very seriously to support effective climate and sustainability governance and disclosure.