Australia's greenwashing regulatory landscape: ASIC and the ACCC stay focused

What you need to know

• Over the last year, ASIC and the ACCC have secured civil penalties for greenwashing in the $8m - $13m range against investment companies, superannuation trustees, and consumer product manufacturers.
• In 2026, both regulators are pursuing further greenwashing proceedings, with a focus on not just the 'saying' of a representation but also on the 'doing', directing regulatory attention to alleged failures in governance and compliance with statutory duties.
• Scrutiny of alleged greenwashing also extends beyond the regulators. The Senate inquiry report into greenwashing (due June 2026) may be a precursor to legislative reform, and is likely to reinforce public interest in testing environmental and sustainability claims through private litigation.

What you need to do

• If you make, or are considering making, environmental statements, avoid vague or aspirational language and ensure that each statement has a reasonable basis capable of substantiation, particularly where it is forward-looking. This may include having a robust scientific basis for the claim, such as supporting studies or reports.
• Given ASIC's recent broadening of greenwashing allegations to include Corporations Act duties, it is also important to ensure that internal systems genuinely support a company's public statements. Carefully consider the adequacy of your compliance systems and controls, and audit whether those systems are operating effectively to ensure compliance in practice.
• It may also be timely to reassess other ESG-related processes, procedures and statements, given the risk that causes of action underpinning recent climate litigation may be repurposed in other areas.

In this update we look at the current greenwashing regulatory landscape, including the regulatory posture of ASIC and the ACCC

Since the 2022–23 financial year, the Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC) have repeatedly identified greenwashing as an enforcement priority. Over the past year, the first wave of proceedings brought by the regulators has concluded, with the Federal Court of Australia imposing substantial civil penalties. Those test cases have also produced valuable and important guidance on the boundaries of greenwashing claims. While ASIC has not expressly listed greenwashing as an enforcement priority this year, it remains "alert to the risk of serious instances of misleading and deceptive conduct in this area". Ongoing enforcement activities nevertheless indicate that regulatory attention on greenwashing will continue through 2026 and beyond.

More broadly, scrutiny of environmental claims is likely to intensify with the Senate inquiry report into greenwashing due in June this year, while the increasing number of companies mandated to report on climate-related matters is likely to attract activist attention, supplementing the stream of private climate litigation over the last couple of years.

The emergence of regulatory greenwashing litigation

Reflecting their different roles in the Australian regulatory landscape, ASIC and the ACCC have adopted broadly aligned (though sector specific) definitions of greenwashing:

• ASIC defines greenwashing as "the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical"; and
• the ACCC's definition is somewhat broader, framed generally in consumer law terms as "false or misleading environmental claims that make a business appear more environmentally beneficial than they really are".

Following a significant increase in activist climate litigation since 2020, ASIC and the ACCC first included greenwashing as an enforcement priority in FY2022/23. Since then, both regulators have moved beyond signalling intent and have actively enforced laws protecting consumers against greenwashing through infringement notices, detailed guidance and civil penalty proceedings, resulting in substantial penalties.

In June 2022, ASIC introduced INFO 271, which sets out questions for financial services providers to consider, to help avoid misleading or deceptive practices when promoting their products and services. Three proceedings brought by ASIC have also concluded, all of which concerned false or misleading representations regarding various ESG claims made to investors and/or superannuation fund members. All prosecutions were successful in the Federal Court, which imposed significant penalties:

• Active Super: Active Super was found by the Federal Court to have made false or misleading representations to members and potential members of the super fund by promoting "green" or ESG credentials that it did not invest in certain sectors or activities, when in fact it did. This included gambling, coal mining, oil tar sands and Russian companies. Active Super was ordered to pay a $10.5 million penalty in 2025. Read our previous update on the liability judgment here.
• Mercer: The Federal Court ordered Mercer to pay an $11.3 million penalty in August 2024, after it admitted making false or misleading representations to investors regarding ESG claims for its sustainable superannuation products and associated exclusions. The statements represented investments in companies involved in carbon intensive fossil fuels (such as thermal coal), alcohol production and gambling were excluded from its 'Sustainable Plus' superannuation options, but were in fact not. Read our previous update on this matter here.
• Vanguard: The Federal Court ordered Vanguard Investments to pay a $12.9 million penalty for making misleading claims about its ESG exclusionary screens. Vanguard represented its 'Vanguard Ethically Conscious Global Aggregate Bond Index Fund' offered an ethically conscious investment opportunity when in fact a significant proportion of investments in that fund were not researched or screened against its ESG criteria. Ashurst has previously provided an update on this matter here.

In December 2023, the ACCC released its 'Making Environmental Claims' guidance for businesses, which sets out eight key principles to consider when making an environmental claim. The eight principles cover accuracy and evidence to ensure the claim is robust, transparency and completeness of the claim, and clarity and presentation, with businesses to avoid broad, unqualified terms like "green" or "eco-friendly". Imagery and colours are also discussed, with businesses needing to ensure visual elements do not also create a misleading impression. Ashurst has previously prepared an update on the guidelines, available here.

The ACCC also ran its first successful case in 2024 against Clorox Australia Pty Ltd for allegedly making false or misleading representations that its GLAD Kitchen Tidy Bag and Garbage Bags consisted of 50% recycled “ocean plastic”. The ACCC considered that the "ocean plastic" headline, along with wave imagery and use of the colour blue created the impression that the bags were made from plastic collected from the ocean, when the bags were in fact made from plastic collected from Indonesian communities not located near the shoreline. The Federal Court agreed, and ordered Clorox to pay $8.25 million.

The ACCC's current enforcement activity

ASIC and the ACCC continue to actively pursue enforcement action against alleged greenwashing in 2026. The ACCC has identified "Consumer, fair trading and competition concerns in relation to environmental claims and sustainability, with a focus on greenwashing", as a 2025/2026 enforcement priority. Consistent with this focus, the ACCC commenced two proceedings in the second half of 2025 concerning alleged false or misleading greenwashing claims:

• Edgewell Personal Care: the ACCC alleges Edgewell Personal Care made false or misleading claims that its Hawaiian Tropic and Banana Boat-branded sunscreens were 'reef friendly' in circumstances where the claims were made without a reasonable scientific basis and the products contained other ingredients known to be harmful to the marine environment. Edgewell says these claims were reasonable on the basis that the products did not contain any specific ingredients banned by the Hawaiian Government for causing damage to coral reefs.
• Australian Gas Networks: the ACCC alleges Australian Gas Networks (AGN), in its 'Love Gas' ad campaign, made false or misleading claims that the gas it distributes in its network will be renewable within a generation. Specific statements the ACCC has pointed to include, "some things never change, but the flame we use will", "it's becoming renewable", "controllable, reliable gas" and "for this generation and the next". AGN denies that the advertisements conveyed the representations alleged, instead contending a narrower representation that gas distributed to households "was becoming renewable" and that the benefits of natural gas (namely, control, reliability, comfort, continuity and instantaneousness) would not change as gas becomes renewable. AGN asserts it had reasonable grounds to make this representation due to a range of circumstances, including: multiple technically feasible pathways to deliver renewable gas (hydrogen, biomethane, synthetic methane); the compatibility of its existing networks with biomethane and its ongoing upgrades to polyethylene pipelines for hydrogen readiness; international research demonstrating that 100% hydrogen appliances could meet safety and performance standards; significant government support and policy momentum for renewable gas; AGN's own target to transport 10% renewable gas by 2030 and 100% by 2040 (or no later than 2050); and the fact that AGN was already delivering hydrogen blended gas to households in South Australia.

ASIC's current enforcement activity

While ASIC has not expressly included greenwashing as an enforcement priority this year, it has repeatedly confirmed in public statements that greenwashing remains an ongoing focus, and that ASIC should not be taken to be moving away from climate related enforcement action.

In October 2025, ASIC commenced new greenwashing civil penalty proceedings against Fiducian Investment Management Services Limited (FIMS) as the responsible entity of the Diversified Social Aspirations Fund (Fund), an ESG-oriented fund-of-funds. The Fund selected investments by using underlying fund managers or underlying investment funds (Underlying Funds). Rather than investing directly in equities, it allocated capital into the Underlying Funds run by external managers, each with their own ESG methodologies and tolerance thresholds for choosing investments. The Fund's Product Disclosure Statement contained various ESG representations regarding the nature of investments, eg, it would only make investments in companies considered to be positive for society and the environment, and the governance process regarding ongoing monitoring and oversight, including that FIMS would routinely monitor the Fund to ensure it was in accordance with the ESG representations.

In addition to alleging misleading or deceptive conduct in its description of how the Fund works in the Fund's PDS, ASIC, in a first for greenwashing test cases, also relies on responsible entities' duty of care and diligence under s 601FC of the Corporations Act 2001 (Cth) as an additional cause of action. ASIC claims that as FIMS would have understood that there was a risk that the Underlying Funds would not align with the various ESG representations, FIMS as a responsible entity failed to act with care and diligence by not adequately monitoring and managing the Fund. This includes specific allegations that:

• FIMS' Investment Committee monitored the investments of the Fund only by reference to its financial performance and not the Fund objectives or alignment with the ESG statements in the PDS;
• FIMS did not have an ESG expert within the firm assisting in reviewing and monitoring the PDS and the investments of the Fund so that they complied with the Fund's ESG objectives; and
• FIMS never requested, nor received, a list of shareholdings in the Underlying Funds.

As of 30 March 2026, FIMS has agreed to make admissions of contravention and a statement of agreed facts and admissions is yet to be finalised by the parties. The scope of these admissions, including those concerning the care and diligence allegations, and what declarations and civil penalties the Court determines will provide guidance on the extent to which ASIC's approach expands greenwashing-based liability exposure.

Although at an early stage of the proceedings, ASIC's reliance on the duties and obligations of responsible entities as an additional cause of action demonstrates ASIC is expanding the areas of businesses it seeks to investigate in respect of alleged greenwashing. ASIC's action focuses not only on the "saying" (ie, the misleading/deceptive claim), but also on the "doing" (ie, managing and monitoring investments) and systemic compliance with ESG objectives throughout an organisation – at a policy, practice, committee, and evidentiary level.

These proceedings are a timely reminder that Australian businesses should carefully consider the adequacy of their compliance systems and controls not only from a design perspective (ie, whether they are capable of ESG compliance) but also as a matter of practice (ie, whether the implementation of those systems in fact is ensuring ESG compliance). That will necessarily require ongoing and constant monitoring. In addition, areas of uplift that may previously have been considered low risk should be re-assessed if these actions have a nexus to a product or service that is marketed as aligned with positive ESG outcomes.

As an increasing number of companies are mandated to report on climate-related financial matters, and given the transitional limited liability provisions that mean only ASIC (rather than private parties) can pursue misleading or deceptive claims in respect of certain aspects of the mandated disclosures for the first three years of the regime, we may also see public interest groups applying pressure on ASIC to pursue action, for example, relating to non-compliance with sustainability reporting obligations under Chapter 2M of the Corporations Act. Ashurst has recently provided an update on the mandatory reporting regime here.

Other notable developments

Alongside regulator-led enforcement, parliamentary scrutiny is likely to be another driver of attention in this area. In March 2023 the Senate established an inquiry into greenwashing, with a final report expected by 25 June 2026. The inquiry is broad in scope, examining environmental and sustainability claims across a range of industries: energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing and footwear, and:

• the impact of misleading environmental and sustainability claims on consumers;
• domestic and international examples of regulating companies' environmental and sustainability claims;
• advertising standards in relation to environmental and sustainability claims;
• legislative options to protect consumers from greenwashing in Australia; and
• any other related matters.

The significance of this inquiry lies less in immediate legal consequences and more in agenda-setting, indicating potential major reform in this area and reiterating to regulators like ASIC and the ACCC their mandate for enforcement. For Australian businesses, the release of the report, along with the increasing number of businesses captured by the mandated sustainability reporting regime, is likely to intensify public scrutiny of environmental and sustainability claims, and the steady stream of litigation is likely to continue.

There are also a number of international developments and trends that could influence further greenwashing litigation in Australia, such as the recent landmark International Court of Justice advisory opinion on state obligations regarding climate change, the possibility of a novel climate change duty of care following the appeal of Pabai v Commonwealth, and the English High Court liability decision in Mariana v BHP. You can read more about these trends in our article on climate litigation in Australia here.

Finally, organisations should be alive to the risk that causes of action which have led to the proliferation of greenwashing and other climate-related litigation in recent years could be applied by regulators and private litigants to target various ESG-related activities. For example, statements about the robustness of anti-bribery or modern slavery compliance programmes, or about treatment of employees or contractors in the workplace, might also be alleged to constitute misleading or deceptive conduct, or breach of duties of care (statutory or at general law). With this in mind, organisations should take care to adopt similarly robust governance, risk management and compliance arrangements to validate all ESG-related statements and commitments.

Other authors: Oscar Doupe-Watt, Senior Associate; Jessica White, Senior Associate and Honor Kelly, Associate.