FMA investigating three potential greenwashing cases

As part of its supervision of the sector, the regulator monitors market participants’ approaches to ethical investment practices.

An FMA spokesperson confirmed the latest actions to come out of its monitoring activity in a statement to Good Returns.

“The FMA is considering three matters for potential breaches of the fair dealing provisions, relating to ethical investing claims.”

However, the FMA did not name the market players it is looking into or disclose the nature of the potential breaches.

In a recent update on its monitoring of the sector, the FMA says it didn’t see any cases of issuers deliberately using ethical labelling or marketing without the intention of going ahead with an ethical investment strategy.

But confusing, unclear and inconsistent disclosure is more commonplace and the FMA says it is working with managers on how they can improve their practices.

Just last week, the Responsible Investment Association of Australasia’s latest benchmark report named greenwashing concerns as the top deterrent to market growth in the responsible investment space. The report showed a significant upswing in greenwashing concerns and mistrust with 61% of respondents identifying it as a barrier in 2023 compared to 35% in 2022.