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ASIC Issues First Greenwashing Fine

The Australian Securities and Investments Commission has become the first Aussie regulator to issue a fine for false claims of environmental credentials.

ASIC hit energy company Tlou Energy with a $53,280 fine over allegedly misleading statements made to the ASX last October that suggested its Lesedi power station would produce carbon-neutral energy from day one of operations.

ASIC said the company said “it was equally concerned with producing ‘clean energy’ through the use of solar and hydrogen as it was with developing its gas-to-power project”.

ASIC said it has “reasonable grounds” to believe these claims were misleading.

“Tlou’s plans to develop clean energy in the form of solar and hydrogen were at an early stage and were not planned to be significantly advanced until sometime after Tlou was earning revenue through the sale of electricity generated through the combustion of natural gas.”

“[Tlou had] not undertaken any substantive modelling of the likely carbon dioxide emissions that would be generated by the Lesedi Project and would be required to be offset via sequestration for the electricity generated to be ‘carbon neutral via sequestration’,” the ASIC notice reads.

The company also neglected to work on “the feasibility of the Lesedi project producing carbon neutral electricity via sequestration” and had “not undertaken any meaningful investigation as to whether it would be possible to obtain carbon credits or offsets in relation to any sequestration activities undertaken at the Lesedi project.”

Both ASIC and the ACCC warned Australian companies they would be targeting such greenwashing practices.

“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,” ASIC deputy chair Sarah Court warned.

“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.”

Tlou paid the fines but denies any guilt.

“Tlou does not accept that it contravened any provision of the Corporations Act or the Australian Securities and Investments Commission Act but agreed to pay the infringement notices to bring this matter to an end and focus the company’s resources on development of its power projects,” it said in an ASX announcement on Thursday.

 



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