Marketers in funds management are tasked with ensuring their material adheres to ASIC’s regulations* that is also increasing in complexity in the face of fund greenwashing concerns.  

Just recently, thirteen Australian responsible entities adjusted their marketing materials across 18 funds due to issues from insufficient warnings and inappropriate comparisons to downplaying risks in fund promotions. 

By staying across the latest regulations, marketers will achieve quicker turnarounds for producing content with less approval back and forths with their risk and compliance teams.  

So what should marketers keep an eye out for when developing their material?

1. Marketing must give balanced messages about returns, features, benefits and significant risks. 
2. Risk disclosure needs to be clear and prominent. Not hidden within a large disclosure paragraph, for example.  
3. The safety, reliability or security of an investment should not be overstated. 
4. Comparisons with other products or benchmarks must be appropriate and reasonable. 
5. Any reliance on past performance must explain that it is not indicative of future performance. 
6. Care must be taken with the use of images, graphs and tables to ensure they are not confusing to prospective investors. 

From a greenwashing perspective, some requirements are, but not limited to: 

Ensuring to display clear benchmark indexing of funds. Be upfront about any control you have over the benchmarks used for sustainable products and how actively or passively they’re managed.  

Explain the methodology behind sustainability claims: refer to the details of your investment approach and how sustainability factors are woven into investment decisions and the team’s stewardship activities.  

When discussing the carbon footprint of a fund for example, outline what calculation tool was used i.e. was it MSCI’s Climate Search Tool? Or if using words like ‘net zero,’ can this be backed up with a legitimate climate-risk roadmap? 

When referencing net zero – what climate-risk roadmap was referenced? 

Navigating the landscape of compliant funds management marketing material isn’t a straightforward process.  

It’s complex and requires collaboration from all areas of the firm. Further, how a message is communicated can be nuanced and sometimes firms aren’t even aware they’re at risk of greenwashing, for example.  

Keeping across the latest ASIC regulations means quicker turnarounds for marketers and less rework.  

–

References:

*https://asic.gov.au/about-asic/news-centre/find-a-media-release/2022-releases/22-249mr-managed-funds-amend-their-marketing-following-asic-surveillance/