Treasury aims to regulate sustainable-investment product labelling

afr.com:

The Albanese government will draft new laws to regulate how investment products are labelled in an attempt to reduce unverified sustainability claims and ensure environmental credentials are comparable.

The proposal is contained in a “sustainable finance” policy paper published by Treasury on Thursday.

The document flags lifting disclosure requirements for discussions pension funds are having with companies on the energy transition. This comes after the Australian Securities and Investments Commission deputy chairwoman Sarah Court warned super funds at The Australian Financial Review Super and Wealth Summit this week not to overstate their degree of engagement.

Deutsche Bank was targeted for greenwashing at its AGM in Frankfurt in May, 2022. Reuters

The government also wants to see companies publishing more credible “transition plans”, which set company-level emission targets and assessments of risk on shifting towards a net-zero economy.

It said it is “closely monitoring” the Transition Plan Taskforce in Britain, which has published a disclosure framework and sector-specific guidance for such plans, and wants ASIC to supervise the area more closely in Australia.

Banks in Australia have been pushing high-emitting customers on transitions plans, which are used to assess funding, and would benefit if reporting by companies is standardised and reliable.

In a strong endorsement of sustainable finance to drive capital towards companies with cleaner operations, Canberra will take a stronger leadership role developing the markets, which have been under pressure this year amid concerns over regulatory risks the new policy seeks to reduce.

This includes issuing an inaugural Commonwealth sovereign green bond next year. It has set