Greenwashing regulatory roundup
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As consumers globally are increasingly concerned about the ethical implications of their investment and consumption, ‘greenwashing’ has become increasingly topical world-wide. Commensurately, regulators across jurisdictions are stepping up and taking action against companies that misrepresent the extent to which their products or services are environmentally friendly, sustainable or ethical.
In this article, we explore the state of the regulatory environments across different jurisdictions and what your business needs to be aware of when making ESG representations.
Australia
In a landmark decision, Australia’s corporate regulator, the Australian Securities and Investment Commission (ASIC) has been successful in its first greenwashing penalty proceedings against Mercer Superannuation (Australia) Limited (Mercer), where the Federal Court ordered a AUD $11.3 million penalty against Mercer for its greenwashing conduct.
This penalty follows Mercer’s admission to making false and misleading representations relating to the sustainability of its superannuation ‘Sustainable Plus’ investment products. These investment products were marketed as being sustainably-friendly, purportedly excluding investments in fossil fuels, alcohol, and gambling. The Court found that the investments in these products included companies involved in fossil fuel extraction and sales (15 companies), alcohol production (15 companies), and gambling (19 companies).
The Mercer decision also provides insight into the factors the Court considered when exercising its discretion to determine the quantum of an appropriate civil penalty. The maximum penalty available to the Court for a single contravention of the relevant legislation was between AUD $20.5 - 22.4 million. The Court accepted the parties’ joint submission that AUD $11.3 million was an…
