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As interest in ESG aligned funds reaches unprecedented levels within a strongly performing Australian financial market, increased attention has turned to the question of ‘how we can ensure well-meaning investors aren’t being misled by green washing?’.

Cathie Armour, Commissioner of ASIC, recently announced a review into green washing practices, aimed at improving market governance and accountability amongst some of Australia’s top funds.

The action comes off the back of results revealed by the Responsible Investment Association Australasia (RIAA) which found that 62% of surveyed respondents believed ethical super funds outperform others (up from 29 per cent in 2017).

As a firm believer in ESG investing, we are always pleased to see action in Australia that moves us closer toward national policy that protects investor confidence in their investments, that they are as ethical as they are reported to be.

Already we have seen successful rollouts of ESG regulations in other regions, such as the EU taxonomy, which is the foundation of the criteria Vellum uses to assess ESG performance and share six fundamental objectives that guide or business:

  1. climate change mitigation
  2. climate change adaptation
  3. sustainable use and protection of water and marine resources
  4. transition to a circular economy
  5. pollution prevention and control, and protection
  6. restoration of biodiversity and ecosystems and one that does not harm the others

 

It is crucial that we see increased movement toward all-encompassing regulation which protects investors and nurtures the ESG movement in Australia.