Courts to check climate claims

CORPORATE Australia is on notice that glib promises to address climate change no longer cut it as so-called “greenwashing” claims hit the courts.

Global regulators and major investors are joining shareholder activists in driving the nation’s corporate sector to deliver credible plans to hit net zero by 2050.

Plans, rather than generic pledges, are required that also need to include short and medium-term targets, and measurement methodologies.

Major emitters including AGL, BHP, Rio Tinto and Santo have all pledged to hit net zero by 2050 or before.

That has not shielded them from growing shareholder backlashes – and even legal challenges – amid criticism that their emission reduction strategies would fail to meet the goals of the 2015 Paris Climate Accord.

The nation’s regulators, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority, have also made it clear they will be increasing their oversight of climate change reporting.

ASIC in July warned company directors they could face misleading and deceptive conduct charges should they overstate the environmental credentials of their operations.

The corporate cop is also reviewing whether superannuation funds that promote their investments as green, clean and ethical do in fact stack up.

Claims of greenwashing – overstating the environmental benefits of an organisation’s products or environmental footprint – are in the courts.

Oil and gas producer Santos is being sued by the Australasian Centre for Corporate Responsibility for alleged misleading or deceptive conduct by claiming gas is “clean energy” and that it has a “clear and credible” path to net zero by 2040.

ACCR climate and environment director Dan Gocher said while climate change had moved firmly onto the radar of major corporations, too many companies were still not being bold enough in their pledges.

“There is a lot of green washing around net zero,” Mr Gocher said. “Companies come out and commit to net zero but they don’t provide a lot of substance or their 2025 or 2030 targets are fairly weak. That is a big problem because we need to take action now.”

Companies that talk a big game on climate change but fund industry associations that organise to oppose action are also in the spotlight.