ASIC has taken its first action for ‘greenwashing’ against listed energy company Tlou Energy Limited (Tlou).
Tlou has paid a total of $53,280 to comply with four infringement notices issued by ASIC over concerns about alleged false or misleading sustainability-related statements made to the Australian Securities Exchange (ASX) in October 2021.
ASIC has highlighted greenwashing – the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical – and sustainable finance as a key priority.
ASIC Deputy Chair Sarah Court said, ‘As entities promote sustainability and green practices as part of their value proposition, they must ensure they can support those statements and have a reasonable basis for doing so.
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‘We have published Information Sheet 271 (INFO 271) on how to avoid greenwashing when offering or promoting sustainability-related products or otherwise making sustainability-related claims and urge companies and their advisers to ensure their communication to shareholders, members and the broader market is accurate and has a reasonable basis.
‘ASIC is currently investigating a number of listed entities, super funds and managed funds in relation to their green credentials claims. Companies are on notice that ASIC is actively monitoring the market for potential greenwashing and will take enforcement action, including Court action, for serious breaches,’ Ms Court said.
The infringement notices were issued in relation to statements and images contained in two ASX announcements made by Tlou which claimed that:
- electricity produced by Tlou would be carbon neutral;
- Tlou had environmental approval and the capability to generate certain quantities of electricity from solar power;
- Tlou’s gas-to-power project would be ‘low emissions’; and
- Tlou was equally concerned with producing ‘clean energy’ through the use of renewable sources as it was with developing its gas-to-power project.
ASIC was concerned that Tlou either did not have a reasonable basis to make the representations, or that the representations were factually incorrect.
Tlou paid the infringement notices on 25 October 2022. Payment of an infringement notice is not an admission of guilt or liability.
The specific reasons for ASIC’s concerns in each instance are set out in the four infringement notices which have been published on the Credit and ASIC Act infringements notices register.