By Teresa Torcasio and Katie Lau -
Snapshot
- ASIC and ACCC have each commenced investigations into alleged ‘greenwashing’ by businesses, leading to ASIC’s first ever court action for alleged greenwashing conduct and an ‘internet sweep’ by the ACCC for potentially false or misleading green claims.
- Before making a green claim about a product or service, businesses should consider whether the representation could be at risk of being misleading. The test of whether a green claim is misleading may require more scrutiny than meets the eye.
- Regulatory watchdogs, ASIC and ACCC, have provided some practical tips on how to avoid contravening the law.
- Greenhushing has grown in prominence as a result of the greenwashing crackdown.
A recent ASIC survey of over 1,000 Australian consumers showed that 73 per cent of those who have invested in shares in the past year have declined to move forward with investments due to the companies’ ‘poor environmental record[s]’. Given the progressive public attitude around climate change and other areas of corporate social responsibility, it is unsurprising that businesses may seek to capitalise on consumer values by marketing the positive ‘green’ actions that they may be taking or planning to take.
Australian regulatory watchdogs have responded to this growing phenomenon by reminding the corporate world that environmental claims must not be false or misleading, and the bar for testing whether a claim is false or misleading will be rigorous. ASIC and ACCC have each commenced investigations into alleged ‘greenwashing’ by businesses, leading to ASIC’s first ever court action for alleged greenwashing conduct and an ‘internet sweep’ by the ACCC for potentially false or misleading green claims.
This article discusses proceedings initiated by ASIC against Mercer Superannuation (Australia) Limited in Australian Securities & Investments Commission v Mercer Superannuation (Australia) Limited (‘Mercer’) and analyses the legislative framework underpinning greenwashing claims, providing some insights on what makes a green claim misleading and how risks in this area can be identified and managed.
