Australian and New Zealand ESG Update

Acadian AI ‘green screen’ to autodetect greenwashing in disclosures

Acadian Asset Management has created an automated system to flush out greenwashing in possible investment targets, screening companies for ‘green’ credentials using artificial intelligence. ESG signals are drawn from the text of sustainability reports, regulatory filings, shareholder proposals and other company information and data. Signals include physical and transition climate risks, employee well-being discussions, and corporate culture during the pandemic, to human rights and supply chain issues.

Australia may be excluded from large foreign investment funds

Several large overseas investment funds have indicated Australia may be excluded from billions in investment dollars if the Australian government continues to resist strong climate change action. Invesco, Canada’s Public Sector Pension Investment Board, California State Teachers’ Retirement System and several others are reviewing Australia’s climate risks, resilience and policies in investment decisions. The Resever Bank of Australia is also concerned, noting foreign investors and regulators are focusing on Australia’s decarbonisation efforts.

ASIC investigating greenwashing by super funds and managed funds

The Australian Securities and Investments Commission (ASIC) is looking into ‘greenwashing’ by superannuation and managed funds that could mislead investors in regards to the fund’s ESG practices. ASIC is looking into the claims, with growing interest in ESG investing and how exactly we measure ESG concerns and metrics across products. Labelling of investment products has been a huge concern. The popularity of ESG-labelled investment products means it can be tempting to overblown aspects of a fund to appear more ESG-friendly than it is.