Australia: ASIC Chair Addresses “Greenhushing” Amongst ESG Focus Areas

By Jim Bulling and Grace Hall

The Chair of the Australian Securities and Investments Commission (ASIC), Joe Longo, commented on three key ESG focus areas of the regulator in recent speeches.

In addition to governance, greenwashing and growth in sustainable financing, the Chair discussed the phenomenon of “greenhushing”, where companies decline to make any voluntary climate-related disclosures.

The Chair provided an overview of ASIC’s recent enforcement action with respect to greenwashing, an enforcement priority of the regulator. He then addressed the reactionary response of “greenhushing”, a phenomenon that has been seen globally with respect to net zero commitments. 

The Chair noted that the regulator has observed commentary from some firms domestically to the effect that “we have such a good ESG policy, but we can’t say anything about it because the regulators won’t let us”.

The Chair countered such comments stating said that whilst ASIC’s scrutiny of greenwashing might tempt some firms to engage in “greenhushing”, ASIC’s view is that such conduct is simply another form of greenwashing, being an “attempt to garner a ‘green halo’ effect without having to do the work”.

The Chair cautioned firms against greenhushing stating that “silence from firms and failing to engage isn’t the answer”.

In his speeches, the Chair emphasised the significance of changes to financial reporting and disclosures driven by ESG. He signalled that “major, transformational change has begun”, and that entities need to ensure they act now to prepare for the changes.  He urged companies to review their governance structures to further support climate-related disclosures and to ensure their practices are “well advanced” in preparation for changes in disclosures standards both globally and domestically.