Submission to Treasury: Sustainable Investment Product Labelling
The Australian Sustainable Finance Institute (ASFI) has lodged its submission to Treasury’s consultation on Sustainable Investment Product Labels.
ASFI strongly supports the introduction of a labelling regime that provides consumers with clear, comparable information about sustainable investment products.
A well-designed framework has the potential to reduce greenwashing risk, increase market confidence in sustainability claims, and channel more capital towards credible sustainability outcomes — supporting Australia’s net zero and broader sustainability goals.
In our submission, ASFI outlines three key principles that should guide the design of an Australian product labelling framework:
Flexibility – the framework should be sufficiently flexible to accommodate and apply to a wide range of investment products and sustainability-related benefits, while providing enough detail and rigor to support clarity for investment product issuers and consumers. Highly prescriptive requirements that could have the effect of creating de facto standardised investment products should be avoided to enable ongoing innovation in the emerging sustainable finance market.
Integrity – the framework should ensure that products marketed as having sustainability characteristics meet a minimum level of credibility, consistent with consumer expectations. According to consumer testing undertaken by the UK Government in the development of the UK product labelling scheme, consumers expect investment products marketed as sustainable to contribute to positive environmental or social outcomes. Consumer research in Australia echoes this, with 79% of Australians expecting their bank, super fund or other investment to deliver positive impact in the world. The Australian framework should require ‘sustainable’ products to demonstrate that funds invested under that product are supporting activities that are aligned with the product’s sustainability objective.
International alignment – while we expect an Australian product labelling framework would be based in Australian corporations and consumer law, there would be value in Australia’s approach being informed by and potentially aligning with core elements of one or more comparable jurisdictions where appropriate. This would reduce transaction costs and complexity for global investment managers looking to offer products in Australia.
By embedding these principles, Australia can design a regime that supports transparency, protects consumers, and strengthens the credibility of sustainable finance.
The full submission is available for download below.