CPA Australia, the country’s largest accounting body, has urged the federal government to tighten rules governing the naming and marketing of managed investment and superannuation products, warning that vague sustainability claims risk misleading consumers and eroding trust.
In its submission to a Commonwealth Treasury consultation on sustainable investment labels, CPA Australia said stronger compliance obligations are needed to combat greenwashing and ensure investors can confidently select products that align with their ethical and environmental values.
Patrick Viljoen, ESG Lead at CPA Australia, said: “The market is awash with products that claim to be socially responsible. Consumers could understandably assess such claims as fair and accurate, under the assumption that they are underpinned by a robust regulatory framework. We need compliance obligations to catch up with consumer expectations.”
The accounting body welcomed government efforts to build a clearer labelling system, but argued that reforms must include standardised labelling and mandatory disclosures. These would apply to all products marketed as “responsible”, “sustainable”, “ethical” or “green”, and require upfront and ongoing evidence of how sustainability is genuinely integrated into investment strategies.
In a joint submission with Chartered Accountants Australia and New Zealand, CPA Australia cited reforms in the UK and US, where investment products must invest at least 70% of their assets in line with stated sustainability objectives and adhere to strict naming and marketing rules.
“Any reforms should make it easier for Australians to make more ethical investment decisions and increase accountability on product issuers,” Viljoen said. “If a product promotes socially responsible investments, it should be clear exactly what this means and where investors’ money will be going.”
