The scrutiny of corporate claims on climate action is heating up, with two major developments in recent weeks.
In October, ASX-listed Tlou Energy became the first Australian company fined by the Australian Securities & Investment Commission over concerns about alleged false or misleading sustainability-related statements.
ASIC questioned several of Tlou’s climate-related claims, including whether the electricity it produced would be carbon neutral.
ASIC further revealed that it was investigating other listed entities, super funds and managed funds, foreshadowing court action for serious breaches.
Greenwashing was also a major focus of COP27 last week, with a major UN report released outlining 10 recommendations to bring “integrity, transparency and accountability to net zero” for “non-state actors”.
Key recommendations included organisations taking responsibility for scope three emissions and outlining a clear transition plan to meet their stated short, medium and long-term emission reduction targets. Further, organisations could not claim to be net zero if investing in new fossil fuel projects.
Greenwashing misleads investors and consumers into making decisions they would not otherwise make. More importantly, it undermines global efforts on climate change, by masking underperformance and eroding trust.
In Australia, the conversation about net zero, gas, the retirement of coal and the rollout of renewables is too complex and important to be undermined by misinformation.
The crackdown on greenwashing should be welcomed by us all.
This article was also published in The West Australian newspaper. If you would like guidance on how to avoid greenwashing and build trust with your stakeholders through transparent communication and engagement, please contact ReGen Strategic.