First fine for greenwashing by major Australian regulator
In a first for the Australian corporate regulator (ASIC), an ASX listed company has been fined having been issued with infringement notices for alleged false or misleading sustainability-related statements made to the Australian Securities Exchange during 2021 (LinkedIn News Australia).
The ASIC Claims
As reported by the Australian Financial Review, a series of Tlou Energy ASX announcements in early 2021 made claims about its carbon neutrality and clean energy initiatives, which ASIC deemed were ‘false and misleading’ as Tlou had not undertaken any substantive modelling of the likely carbon dioxide emissions that would be generated from the Lesedi Power Station in South Africa.
Further, Tlou had also not “undertaken any meaningful investigation” whether its offset method of choice – carbon sequestration – was actually a feasible option for neutralising the power plant’s emissions.
ASIC has issued Tlou with an AUD$53,280 fine for ‘greenwashing’ as a deterrent to other companies to make public statements that were either exaggerated or unsubstantiated. Greenwashing is a term used to describe a false, misleading or untrue action or set of claims made by an organisation about the positive impact that a company, product or service has on the environment.
The Tlou Energy Response
A news release on the Tlou Energy website reveals that the company has accepted and paid the fine, however, “does not accept that it contravened any provision of the Corporations Act 2001 (Cth) or the Australian Securities and Investments Commission Act 2001 (Cth)”.
This release further states that Tlou “agreed to pay the infringement notice to bring this matter to an end and focus the company’s resources on development of its power projects”.
ASIC has advised Tlou that it will not be taking any further enforcement action arising from its investigation.
The Outcome
ASIC deputy chair Sarah Court warned that companies engaging in similar misconduct were on watch by the regulator, who is “monitoring the market for potential greenwashing and will take enforcement action, including court action, for serious breaches.”
It is yet to be seen as to whether this fine will send a message to industry, and with a precedent now set it will be interesting to see whether future regulator scrutiny results in more substantial fines being handed out.
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