May 1, 2025
As Australia moves towards comprehensive climate-related disclosures, greenwashing and incomplete reporting have emerged as primary enforcement targets. Recent ASIC actions highlight the critical importance of holding-level emissions data, and how its absence creates significant reputational and regulatory risks for superannuation funds and their managers.
ASIC's tougher stance on greenwashing
ASIC has actively pursued greenwashing misconduct across super funds and managed funds, with recent prominent settlements:
Mercer Superannuation (2023) faced an $11.3 million fine.
Active Super (2025) was penalised $10.5 million.
These cases involved overstating ESG commitments, particularly around exclusions such as fossil fuels and gambling, due to inadequate transparency and insufficient verification of underlying investments.
At the recent RIAA Conference in May 2024, ASIC Chair Joe Longo clarified ASIC’s enforcement priorities, emphasizing:
A more aggressive pursuit of greenwashing than breaches of mandatory sustainability reporting requirements, given immediate risks to market integrity.
Misleading ESG statements fall under existing consumer protection laws, irrespective of newer mandatory disclosure regulations.
Missing data in ASIC cases: core issues
Both Mercer and Active Super failed to substantiate ESG exclusion claims due to:
Lack of holding-level transparency: Without detailed visibility into investment holdings, funds could not reliably verify adherence to ESG policies.
Broad, non-specific ESG policies: Policies lacked enforceable mechanisms to ensure compliance at a granular investment level.
Had precise, holding-level data been accessible, these enforcement actions might have been avoided by enabling clear substantiation of ESG commitments.
ASIC Regulatory Guide 280 (RG 280)
ASIC’s RG 280, published March 2025, outlines how mandatory sustainability reporting under the Corporations Act and AASB S2 will be regulated:
Aimed at corporations, superannuation entities, and investment schemes, it stresses clarity, comparability, and auditability in disclosures.
ASIC will actively address misleading sustainability statements, demanding corrections or initiating investigations.
Reinforces directors’ duties to thoroughly verify climate-related disclosures, including scenario analysis, Scope 3 emissions, and governance structures.
Why holding-level data collection is crucial
Holding-level data mitigates critical risks:
Greenwashing risk: Ensures ESG claims are verifiable and credible under stringent consumer laws.
Regulatory compliance risk: Protects entities from enforcement actions under RG 280 by providing accurate and auditable data.
Data reliability: Establishes a robust factual basis for disclosures, particularly within private market investments, reducing reputational and compliance vulnerabilities.
Positive industry developments and solutions
ASIC: Enhancing enforcement and advocating for comprehensive verification processes.
Trustees: Updating mandates to explicitly require detailed holding-level data from fund managers.
Data providers: Solutions emerging to resolve data fragmentation across both private and public market investments.
Pathzero’s role in addressing industry challenges
Pathzero addresses these challenges directly by:
Capturing comprehensive holding-level emissions and investment exposure data.
Providing tailored calculation tools and automated, seamless data integration.
Facilitating secure, auditable multi-party disclosures to confidently substantiate ESG claims.
Ensuring robust compliance with RG 280 requirements and ASIC expectations.
By enhancing transparency and data integrity, Pathzero supports superannuation funds and fund managers in confidently navigating the complexities of greenwashing risk and regulatory compliance.