ESG for Lawyers

In Australia, the actions are originating from two sources. Regulatory actions driven by the regulators like ASIC or ACCC and consumer driven actions by the civil society entities and sometimes individuals. The consumer driven actions can include both litigation or complaints to the Ad Standards.

In greenwashing compliance, it is really important to follow the litigation space because a lot of the jurisprudence will be originating from that space.

I have relied on the excellent database maintained by the Sabin Center for Climate Change Litigation Database, for my analysis.

Corrective Actions by ASIC

ASIC said that it has secured 23 corrective disclosure outcomes and issued 11 infringement notices between July 2022 and March 2023 as part of its investigation in to public companies, managed funds, and superannuation funds about their ESG credentials.

Litigations and Complaints

2022
ASIC v. Mercer (decided)

Australian Investments and Securities Commission (ASIC) brought an action against Mercer Superannuation (Australia) Limited in the Federal Court. In a victory for ASIC, Mercer will pay a $11.3 million penalty after making misleading statements about the sustainable nature of some of its superannuation investment options.

Mercer offered investment options in assets which were supposed to exclude carbon intensive fossil fuel like thermal coal extraction, alcohol production, gambling, all of which were flouted.

2023
ASIC v. Vanguard (decided)

The Federal Court has found Vanguard to have contravened the ASIC Act by making misleading claims about certain ESG exclusionary screens applied to investments in a Vanguard index fund. What penalty Vanguard will have to pay is not yet decided.

2023
Australian Parents for Climate Action (AP4CA) v. EnergyAustralia
Pending

EnergyAustralia offered “carbon neutral” gas and energy products which are based on purchase of carbon credits. AP4CA argues that carbon offsets do not cancel out or neutralize the emissions and advertising it as such amounts to misleading or deceptive conduct under the Australian Consumer Law.

2023
ACCC Carbon Neutral Claims
Pending

Climate Active program is a certification program from the Australian Government for Australian businesses that certifies businesses and organizations that have “proven that they are measuring, reducing, and offsetting their emissions, with a net result of zero emissions”.

The Australia Institute is a public policy think tank based in Canberra, has alleged that the Climate Active certification is misleading and deceptive under Australian Consumer law and referred the program to the Australian Competition and Consumer Commission (ACCC) for investigation.

2023
ACCC Toyota Environmental Claim
Pending

Certain claims of Toyota regarding the environmental performance of their vehicles and their net zero ambitions have been challenged by Greenpeace Australia Pacific for being misleading or deceptive.

2023
ACCC APPEA “Future of Gas” Campaign
Pending

Lock the Gate Alliance and Comms Declare jointly submitted a complaint to the ACCC about certain claims in the “future of gas” campaign from Australian Petroleum Production and Exploration Association for breaching Sections 18 and 19 of the Australian Consumer Law. According to the complaint, fossil fuel being promoted as essential to a net zero transition without providing information about renewable energy is a “false and misleading sustainability claim”.

2022
PCWP and Others v. Glencore
Pending

Legal complaint on behalf of the Plains Clan of the Wonnarua People (PCWP) and Lock the Gate Alliance with ACCC and ASIC regarding Glencore’s misleading claims and climate impact and behavior towards Traditional Owners.

While Glencore claimed publicly to have decarbonization plans in place, a legal investigation by Environmental Defenders Office (EDO) found no evidence to support these claims. In addition, Glencore is expanding its coal production so the net zero claims may amount to greenwashing. The grounds for the complaint are these are misleading or deceptive conduct under the Corporations Act and/or Australian Consumer Law and whether the advertising materials breach the Australian Advertising Codes.

2021
Environmental Defenders Office (EDO) on behalf of Australasian Center for Corporate Responsibility (ACCR) v. Santos
Pending

ACCR is a shareholder advocacy NGO. ACCR challenged two declarations by Santos that it provides (a) clean natural gas and (b) has a plan for net zero emissions by 2040. ACCR claimed that (a), that natural gas is “clean fuel” providing “clean energy” mispresents the true effect of natural gas on the environment. ACCR alleges that Santos’ net-zero claim depends on undisclosed assumptions about the effectiveness of carbon capture and storage processes.

2021
Complain to Ad Standards on HSBC’s Great Barrier Reef ad
Decided

In 2021, a 17 year old student, filed a complaint with Ad Standards against HSBC for a marketing campaign touting its support for the protection of the Great Barrier Reef while funding fossil fuel operations.

Ad Standards assessed the claim against the Environmental Claims Code and dismissed the claim on grounds that HSBC had not breached any relevant section of the Environmental Claims Code.

All opinions are personal.

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Samarpita