Sustainable investment product labels
Submission Date: 17 September 2025
This submission concerning sustainable investment product labels is made jointly by the Financial Services Committee of the Business Law Section of the Law Council of Australia and the Superannuation Committee of the Legal Practice Section of the Law Council of Australia (jointly the Committees) in response to the consultation paper released by Treasury on 18 July 2025 (Consultation Paper).
The Committees provided a submission to the Treasury to respond to the questions posed in the Consultation Paper.
Background
The Consultation Paper seeks views on possible policy options to underpin a Sustainable Financial Product Labelling Framework to inform ongoing policy development and regulatory engagement on sustainable financial product labels. It forms part of the Federal Government’s broader Sustainable Finance Roadmap. The target date for implementing sustainable investment product labels is 2027.
Submissions
The Committees consider that it is appropriate for Treasury to be considering these matters at this time, and that it is appropriate for Australia to seek to keep up with developments in this space in comparable overseas jurisdictions.
Currently there is considerable uncertainty around the meaning of terms such as “sustainable” and “ethical” and inconsistency in their use, which create risks that consumers could be misled through misunderstanding these terms, and also risks for product issuers wishing to appropriately describe their products and investment approaches. In the Committees’ view consumers and product issuers would benefit from some clarification in use of terms such as “sustainable” and “ethical” (whether in headline product labelling or in Product Disclosure Statement (PDS) disclosure) and when describing approaches to sustainable investing, which ideally should be sourced from international (eg United Nations) standards.
In view of the impending application of mandated Climate Related Financial Disclosure (CRFD) for regulated superannuation funds and registered managed investment schemes for the year commencing 1 July 2026, references to sustainability in terms of environmental considerations/risks and impact ought to reference the CRFD terminology that will apply to that disclosure.
The Superannuation Committee notes that industry-sponsored/agreed and simple to understand “Standard Risk Measures” are used to assist in categorising the expected volatility of investment product and options within a product. A similar approach could be adopted, to assist product providers to succinctly define (and monitor and report) their product offering in terms of “sustainability” generally or across separate elements of that term, which could assist ease of understanding and comparison by consumers. Certain prescribed text, examples (showing limits of any screens/exclusions etc), and warnings could accompany such disclosure in a similar manner to current requirements for prescribed fee disclosure tables in PDS documents.
The Committees note that the Consultation Paper is relatively short and believes that, in order to meaningfully respond to some of the questions posed, it would have been preferable to have access to more detailed information.
The questions posed by Treasury in the Consultation Paper, and the Committees’ responses, are set out in the submission.
Last Updated on 11/11/2025
Share
Tags
Most recent items
Business Law Section
Guidance Note 4—Remedies General
Law Council
Regulatory guidance and the Reforms Guidance
Law Council
Exposure Draft AML/CTF Transitional Rules
Trending Items
Law Council
Australia’s 2022-23 Migration Program
Law Council