In a nation-first, Australia’s corporate watchdog has fined solar and gas firm Tlou Energy $53,280 (US$34,625) for “greenwashing” and claiming its electricity production was carbon neutral.
Greenwashing is the practice of misrepresenting the extent to which a product, service, or investment fund is environmentally friendly, sustainable, or ethical.
The practice can be carried out across a range of industries, whether it is fund managers combining green and fossil-fuel investments into one product to ensure overall returns remain strong or in this instance, energy companies claiming their operations are carbon neutral when they are not.
“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,” said Sarah Court, deputy chair of the Australian Securities and Investment Commission (ASIC).
“ASIC is currently investigating a number of listed entities, super [pension] funds, and managed funds in relation to their green credentials claims,” she said.
“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.”
ASIC issued Tlou with four infringements and accused the company of claiming its electricity production was carbon neutral; that its gas-to-power project was “low emissions”; that it had environmental approval and the capability to generate certain amounts of electricity from solar power (when it did not); and that it was concerned about producing clean energy.
The corporate regulator said it did not have a “reasonable basis” to make any representations that are “factually incorrect.”
Tlou paid the fines on Oct. 25.
Greenwashing the Bane of Progressives and the Right
Targeting the greenwashing will likely appeal to both sides of the political aisle, with progressives keen to ensure companies are not simply “joining the bandwagon” and properly implementing initiatives like net zero.While at the same time, those on the right will be keen to test the viability of 100 percent green products and services in the market without being propped up by non-green elements.
In fact, oil and gas engineer Peter Castle has previously noted that the clean energy industry—notably hydrogen—is not entirely free from the use of fossil fuels.
“Note that this hydrogen is only ‘green’ because of a technicality, in reality, the electricity comes from the grid so it is not 100 percent renewable (but insider note: some plants have purchase agreements in place so they can claim their portion of electricity is part of the renewable portion of the current supply mix).”
Meanwhile, managed funds have been accused of mixing and matching different investment options (green and fossil fuel) to ensure the returns for customers remain strong while at the same time saying they have green credentials.
This has spurred tech investor Steve Baxter to suggest there needs to be more disclosure and transparency of these funds, particularly those linked to major investment firms like BlackRock, which actively encourages companies to adopt net-zero initiatives.
“If these funds are pressuring companies to do things that see them underperform, then you have to wonder what incentive operates inside that fund to push that angle?” he told The Epoch Times in an email.
“Are they being rewarded for poorly performing investments? Are they charging more for environmental, social, and governance (ESG) investments to cover or compensate (the fund manager) for the seemingly illogical pressure they are bringing to bear on their portfolios?”
