Greenwashing lawsuits are coming for corporate Australia
The ACCC and ASIC are set to unleash a deluge of lawsuits across the economy, which could result in hundreds of millions of dollars in penalties.
The environmental claims of carmakers, energy suppliers, clothing brands or cosmetic companies are no longer purely the purview of frustrated climate activists. Greenwashing has hit the regulatory mainstream.
Australia’s securities and consumer watchdogs are embarking on what promises to be a long run of enforcement on greenwashing — the practice of companies overstating their environmental credentials — which can include anything from emissions reductions targets to sustainability claims about materials used in products.
Companies have been eager to improve and assert their environmental credentials in recent years, amid growing pressure from increasingly climate conscious investors and customers. But those that have overstepped the mark are now in the regulatory crosshairs. The ACCC/ASIC enforcement wave is set to unleash lawsuits across the economy, which in turn could see fines of up to $50 million issued for breaches of consumer law.
Both ASIC and the ACCC have actually had tools to tackle misleading or deceptive claims and conduct for years. "There is a perception that greenwashing is this sort of new beast," said Alyssa Phillips, a partner at Ashurst. "It is not. The law has not changed.”
