“We review our disclosures,policies and investments as ESG reporting,data and investment evolves.”
Acting executive director Market Forces Will van de Pol said his organisation had noticed companies removing climate action commitments in the last couple of months.
“We’ve seen a number of instances of Australian super funds pulling down climate disclosures and members are rightly concerned to see super funds walking back climate disclosures and commitments,” he said.
“It’s great to see regulator scrutiny and accountability on these issues,but companies shouldn’t be responding by lowering their ambition. They need to put in the work to actually live up to their climate commitments.”
Many companies have publicised their commitment to climate action in response to consumer and shareholder demand. But Australian regulators have started holding them to account for alleged greenwashing which involves making false or unfounded claims about sustainability and climate action. Companies going quiet about their emissions-reduction goals are said to be “green hushing”.
The BHP board recently said shareholder proposal calling for greater advocacy on climate action would carry a legal risk.
“The risk of legal action by regulators,NGOs and other interested parties in relation to greenwashing is now significant,and the Board does not consider it appropriate to unnecessarily expose the Group to that additional risk,”a BHP report states in its last annual general meeting notice.
Woodside Energy has also highlighted potential litigation risk in its2022 Climate Report. A Woodside spokeswoman said it had identified potential key climate-related risks but “this does not necessarily mean that the risks have materialised in practice or that the mitigations are currently being pursued”.
A BHP spokeswoman pointed to chair Ken MacKenzie’s AGM comments last year when he said the company was “very aware of the concerns around greenwashing” and not certain of the pathway to get to decarbonisation. “You should think of it as an ambition,as opposed to a commitment to get there. But it shouldn’t be interpreted as a lack of ambition because we’re doing a lot of work with our downstream steel customers in order to reduce the emissions of the supply chain,” he said.
Last year,the Australasian Centre for Corporate Responsibility (ACCR) launched legal proceedings in the Federal Court alleging that Santos Ltd has breached the Corporations Act 2001 (Cth) and the Australian Consumer Law by engaging in misleading or deceptive conduct relating to its “clean energy” claims and its Net Zero plan in its 2020 Annual Report.
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ASIC launched its first civil legal action against alleged greenwashing in the Federal Court against Mercer Superannuation (Australia) late last month. The ACCC is also investigating a number of businesses for potential “greenwashing”,followingan internet sweepwhich found more than half of the businesses reviewed made concerning claims about their environmental or sustainability practices.
The World Economic Forum has reported on the emergence of green hushing,citing a consultancy South Pole survey which found that nearly a quarter of 1200 firms it surveyed do not plan to publicise their science-based emissions targets.
Harriet Kater from the Australasian Centre for Corporate Responsibility said it was seeing a correction in the market after a “prolonged period of greenwashing without consequence”.
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“The fact that corporations are deploying greater vigilance around their disclosures and claims is positive and should not be interpreted as a backwards step,” she said. “However,there are instances where companies have used greenwashing risk as a reason to not increase their ambition,which we view as a mere excuse.”
The Australian Institute of Superannuation Trustees declined to comment.
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