AUSTRALIA Law and Practice Contributed by: Michael Lawson, Nicole Brown, Lizzie White and Tamaryn Leach, MinterEllison
statements or “jargon”, including “socially responsible” and “ethical investing”. • Are headline claims potentially misleading? – Sustainability-related “headline claims” should not be misleading or inconsistent with other disclosure document information. • How are sustainability-related factors incor - porated into investment decisions and stew - ardship activities? – Issuers are to specify the sustainability-related considerations taken into account and how they are incorporated into investment decisions and activities. • Has a clear explanation of investment screen - ing been provided? – Disclosures must contain sufficient detail to enable investors to understand the product’s sustainability-relat - ed screening criteria and how this is applied, including whether the particular investment screen applies only to a certain product or to the issuer as a whole. • Is there a clear explanation of the issuer’s level of influence over the relevant bench - mark? – Issuers should disclose their level of influence when influencing the composition of an index against which portfolio composition is determined, or performance is measured. • Is a clear explanation of sustainability metrics provided? – Issuers relying on sustainability- related metrics in assessing whether an investment aligns with their product’s stated objective/strategy should disclose the extent of metrics involvement, sources of metrics and a description of underlying data and risks/limitations. • Are there reasonable grounds for sustain - ability targets? – Products with sustainability targets attached should explain: (a) what the target is; (b) how and when it is expected to be reached; (c) measurement metrics; and (d) any assumptions relied on when setting
targets/measuring progress. • Is information readily accessible? – Inves - tors should have ready access to “adequate information, concise and clear enough to understand the sustainability-related consid - erations incorporated into the product”. This information should be “consistent across all mediums”. ASIC has now provided additional guidance as to the interpretation of the principles through enforcement action. Key takeaways from this enforcement action include the following. • When applying an investment screen, speci - ficity as to the extent of the applicable exclu - sion is essential. • Whether investment screening is a key facet of a bespoke investment strategy or is part of a broader investment policy, the same level of screening specificity is required. • Where third-party data providers are relied upon for investment screening purposes, issuers must be aware of the scope and accuracy of that data as is captured by the INFO 271 principles. • ESG disclosure must be consistent across all platforms, including disclosure documents, websites and social media. • Disclosures made prior to INFO 271 being issued in June 2022 are subject to the prin - ciples, as the law underpinning the principles has not changed. On 23 August 2024, ASIC released Report 791, “ ASIC’s interventions on greenwashing miscon - duct: 2023–2024 ”, outlining its recent green - washing interventions. The report summarises the high-level findings, key recommendations and good practice examples identified from ASIC’s greenwashing surveillance activities dur - ing the financial year 2023–2024.
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