Greenwashing
Greenwashing has become a concern in the world of sustainability and corporate responsibility.
In the Law:
Regulatory measures to combat greenwashing in Australia are on the rise. ASIC has taken action, seeking corrective disclosures, issuing infringement notices, and initiating civil penalty processes against fund managers and companies since the release of Information Sheet 271. The ACCC is also focusing on greenwashing, cautioning businesses against misleading claims that compromise consumer trust and market confidence.
In the Company Boardroom:
Discussions around the evolving ESG regulatory landscape and greenwashing are gaining momentum. Directors are increasingly concerned about the risks involved. Some organisations are modifying or even rescinding ESG targets and tightening language in marketing materials. Moreover, increased expenditure on ESG-related initiatives is expected, including investments in data and tech systems, as well as workforce upskilling.
In the Investment Houses:
Investment professionals are now re-reviewing investee companies claiming ESG status to ensure authenticity. Methodologies employed by third-party ESG rating companies are also under scrutiny.
Our View:
We wholeheartedly welcome the heightened regulatory scrutiny of greenwashing. It will help distinguish companies genuinely committed to improving ESG outcomes from those merely paying it lip service. Mandatory and standardised sustainability disclosures, like the long-awaited ISSB, will provide a framework for transparently reflecting the value and benefits of corporate actions related to ESG. Plus, it’ll reduce the ESG acronym soup.
At Anabranch ESG Advisory, we understand that these developments can be worrying for companies. However, we’re here to help you navigate and mitigate these concerns. For additional information, contact us today at info@anabranchesg.com.au
