Greenwashing under scrutiny: Australian regulators cracking down on environmental claims - part 1 - the year in review

Globally and in Australia there is an increasing focus on the environmental and sustainability credentials of organisations. This in turn has led to claims and regulatory action in which it is alleged that companies have overpromised. While the first ‘greenwashing’ civil penalty proceedings in Australia involve superannuation and investment funds, the risks are not limited to participants in the financial services industry. Consumers are increasingly interested in purchasing (and often paying more for) sustainable or environmentally friendly products and shareholders are more willing to invest in companies that have environmental, social and governance (ESG) and sustainability goals which align with their values. Sustainability and ESG have shifted from being an afterthought to an essential aspect of a business offering in a competitive market. Amid rising consumer and shareholder demand and sophistication, greenwashing is a key area of risk for companies, their advisers and insurers. While there is no one accepted…