Australia’s corporate regulator has issued its first fine for ‘greenwashing’, the practice of making unsubstantiated claims about sustainability or being environmentally friendly, against a listed energy company.
The Australian Securities and Investments Commission (ASIC) has fined Tlou Energy Limited a total of $53,280 over alleged misleading sustainability-related statements made in October last year.
As per its website, Tlou Energy develops “cleaner power solutions for Botswana through gas-fired power, solar power and hydrogen.” It is listed on the Australian Securities Exchange (ASX), London’s AIM market (AIM) and the Botswana Stock Exchange (BSE).
Four infringement notices were issued to Tlou by ASIC for claims that their gas-to-power project would be low emission; that they produce clean energy through renewable sources; that they had both approval and the capability to generate certain quantities of electricity from solar power; and that the electricity produced would be carbon neutral.
There were concerns that “Tlou either did not have a reasonable basis to make the representations, or that the representations were factually incorrect,” read the statement by ASIC.
The infringement notices were paid by Tlou on 25 October, though ASIC highlights that payment of such notices is not an admission of guilt or liability.
ASIC Deputy Chair Sarah Court added that greenwashing and sustainable finance remains a key priority for the corporate regulator.
“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,” Ms Court said.
“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.”
The Australian Competition and Consumer Commission (ACCC) has also voiced its concerns about corporate greenwashing amid “growing concerns that some businesses are falsely promoting environmental or green credentials to capitalise on changing consumer preferences”, according to ACCC Deputy Chair Delia Rickard.