The Joint Associations  have welcomed the Government’s consultation on a Sustainable Investment Product Labelling Regime, recognising its importance in improving transparency, comparability and confidence in products marketed as “sustainable”.

We support the introduction of a consistent labelling framework across financial products that choose to make sustainability claims. Clear and credible labels will help investors better understand sustainability objectives and compare products, while also supporting product issuers in responding to growing investor demand. However, the regime must strike the right balance between standardisation and flexibility to allow for innovation and evolving investment approaches.

Scope of the regime

We recommend that the regime apply broadly across financial products, using the existing definition of “financial product” in the Corporations Act. The regime should not be limited to retail investors or pooled products, as this would be inconsistent with the Government’s Sustainable Finance Roadmap and could exclude investors accessing sustainable products through platforms or wholesale structures. Any product that markets itself as “sustainable” should clearly fall within scope.

Use of sustainability terminology

We support a broad, non‑exhaustive list of sustainability terms embedded in regulation, grouped into key categories such as climate, social, nature and governance. This approach promotes comparability while maintaining flexibility as terminology evolves. We also recommend adding terms such as “transition”, “mitigation”, “adaptation”, “do no significant harm” and “minimum social safeguards”, while removing terms that risk confusion or dilution of intent.

Disclosure framework

Mandatory disclosure is essential, but we do not support introducing a standalone “consumer‑facing disclosure” regime. Instead, sustainability disclosures should be embedded within existing frameworks, such as Product Disclosure Statements, annual reports and investor‑facing materials. We recommend a hybrid disclosure model, with a prescriptive core covering sustainability objectives, key metrics and targets, supported by principles‑based elements to allow flexibility.

Thresholds and evidentiary requirements

We no longer support a single prescribed sustainability threshold. Instead, thresholds should be tailored to the nature of the sustainability claim, with clear disclosure and tracking requirements set out in regulation. Direct and indirect investments should be treated consistently, supported by robust evidentiary standards aligned with recognised frameworks and reporting standards.

Overall, a well‑designed labelling regime will reduce greenwashing risk, enhance investor confidence and ensure sustainable investment products are true to label — delivering better outcomes for investors, issuers and the financial system as a whole.