On 27 October 2022 ASIC issued four infringement notices, for a total of $53,280 against listed energy company Tlou Energy Limited (Tlou) for alleged false or misleading sustainability-related statements made to the Australian Securities Exchange (ASX) in October 2021.
Tlou, in two statements claimed that:
- electricity produced by Tlou would be carbon neutral;
- Tlou had environmental approval and the capability to generate certain quantities of electricity from solar power;
Tlou’s gas-to-power project would be ”low emissions”, and Tlou was equally concerned with ”clean energy” through the use of renewable sources as it was with developing its gas-to-power project.
ASIC asserted that Tlou contravened s 12DB(1)(a) of the Australian Securities and Investment Commission Act 2091 (Cth) because it did not have a reasonable basis to make the representations, or that the representations were factually correct. For example, ASIC alleged that at the time the representations were made, Tlou did not have environmental approval to construct a solar farm to generate the quantities of electricity from solar power.
Tlou paid the infringement notices on 25 October 2022. It should be noted that payment of an infringement notice is not an admission of guilt or liability.
ASIC Deputy Chair Sarah Court said, ”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.”
There have been prosecutions since the one reported in this article and the attitude of ASIC should give all those businesses wishing to make claims about their green credentials take care with the claims they make. A recent successful prosecution by ASIC is the Australian Securities and Investments Commission v Mercer Superannuation (Australia) Limited 2024 [FCA] 850.
