21 June Regulatory action on greenwashing June 21, 2024 By ER Law Admin Energy, Environment, Resources and Energy 0 Greenwashing is an enforcement priority for regulators in Australia, including ASIC and ACCC. In the recent case of ASIC v LGSS Pty Ltd [2024] FCA 587 (Active Super case), ASIC was successful against the trustee of Active Super. In this case Active Super was found to have made false or misleading representations that it did not invest in certain sectors or activities. The purpose of these representations was to promote the superannuation fund’s ESG credentials. The court found that Active Super did actually invest in those sectors either directly or indirectly through its investment funds. Greenwashing is an enforcement priority for regulators in Australia, including ASIC and ACCC. In the recent case of ASIC v LGSS Pty Ltd [2024] FCA 587 (Active Super case), ASIC was successful against the trustee of Active Super. In this case Active Super was found to have made false or misleading representations that it did not invest in certain sectors or activities. The purpose of these representations was to promote the superannuation fund’s ESG credentials. The court found that Active Super did actually invest in those sectors either directly or indirectly through its investment funds. The Active Super case highlights the need to ensure that any claims about investments are consistent, verifiable and accurately reflected in how those exclusions or restrictions are implemented. All ESG or responsible investment policies should be reviewed regulatory to ensure they align to investment decisions and relevant disclosures on all platforms. Any methodologies or definitions used to restrict or eliminate certain types of securities must also be in line with what an ordinary and reasonable consumer would understand them to mean. The Active Super case follows ASIC’s successful action in the case of ASIC v Vanguard Investments Australia Ltd [2024] FCA 308. In this case the court found Vanguard had made misleading claims about the composition and exclusionary screening of its Vanguard Ethically Conscious Global Aggregate Bond Index Fund. The case highlights the importance of adequately substantiating any product claims made, if relying on third parties probe the veracity of their statements and ensure any public statements are appropriately reviewed. It is expected that ASIC will continue to increase its scrutiny of “green” or ESG-related claims. Other areas of Government and regulators are also focused on greenwashing. The Senate Standing Committee on Environment and Communications is undertaking an inquiry into greenwashing with its findings expected at the end of the month. Amongst other things, this inquiry is expected to consider legislative options to protect consumers from greenwashing. This government activity is in line with actions taken in the United Kingdom and mainland Europe to crack down on ESG-related claims in various industries. But it is not just ASIC that is cracking down on greenwashing. A recent report by the ACCC found that 57% of businesses reviewed in an internet sweep were potentially giving false or misleading information about greenwashing. Concerns were primarily in eight areas: Vague and unqualified claims; A lack of substantiating information; Use of absolute claims; Use of comparisons; Exaggerating benefits or omitting relevant information; The use of aspirational claims, with little information on how these goals will be achieved; Use of third-party certifications; and Use of images which appear to be trust marks. The ACCC intends to conduct further analysis and will produce guidance material to improve compliance. It has already commenced these steps by releasing eight key principles to making environmental claims. These are: Make accurate and truthful claims; Have evidence to back up your claims; Don’t hide or omit important information; Explain any conditions or qualifications on your claims; Avoid broad and unqualified claims; Use clear and easy-to-understand language; Visual elements should not give the wrong impression; and Be direct and open about your sustainability transition. Demonstrating its intent to consider greenwashing a focus area, the ACCC has also commenced court action against Clorox Australia Pty Ltd for the type of recycled material it has used in some of its products. Given the increased focus on greenwashing by regulators, it can be expected we will see more regulatory action on this issue in the near future. Related Articles COMMUNITY LEGAL RIGHTS IN MINE CLOSURE PLANNING; A COMPARATIVE ANALYSIS OF THREE AUSTRALIAN STATES Professor Alex Gardner, University of Western Australia Law School, and Laura Hamblin, formerly research associate at the UWA Law School, 2021 Why does the Mining Act 1978 (WA) not provide secure legal rights for community consultation in relation to mining lease proposals and mine closure plans? Addressing this question presents an important theme for this comparative review of some core features of the regulatory frameworks for mine closure in three Australian States. It also raises important questions for future legal research. Western Australia, Queensland and Victoria have prominent but vastly different, and thus uniquely significant, mining industries. Western Australia’s mining industry has a long history of large and smaller scale mining of a diverse range of minerals by various methods that pose significant mine rehabilitation challenges.[i] Queensland’s mining industry is similarly large and diverse, dominated by export coal production, and planning future minerals development in a decarbonising world.[ii] Victoria has a smaller mining industry with a large historical legacy dominated by a coal mining industry for domestic electricity generation in the Latrobe Valley, which is closing as the State actively transitions to renewable power sources.[iii] These States also have significant differences in the regulation of their mining industries. What all three States do have in common is the significance of their mining industries to both the State economy and the communities who depend on or live near mining operations. Importantly, all three States are confronting large legal and regulatory challenges in managing mine rehabilitation and closure. The key to addressing these challenges is effective mine closure planning: the closure of a mine site has ripple effects that are not merely environmental and economic, but social and cultural too. The initial approval of a mine closure plan occurs before any mining has begun and, with the life cycle of a mine often spanning decades, regulatory bodies are approving hypothetical closure scenarios, potentially subject to vast changes. Regulatory bodies may then seek to enforce closure requirements enshrined in a plan that may wane in relevance as mining operations progress, the updating of which may depend on the miner. Yet remedying the regulatory system so that it creates adaptable but consistently effective mine closure outcomes for affected communities still begins at planning. Although that planning is an iterative process across the life of the mine, it is very important at the initial stage of approval. Recent legislative reforms in all three States are adding to the regulatory rigour and adaptability of mine closure planning, though there are very different legal requirements for community consultation. This article aims to explain and assess the regulatory reforms by undertaking a comparative analysis of mine closure planning across Western Australia, Queensland and Victoria, with a focus on the initial approval stage and how stakeholders and communities are brought into that process. The facilitation of continuous and comprehensive community engagement is critical to ensuring that mine closure planning accounts for environmental, economic, social, cultural and safety outcomes after mine closure, but it has not been possible to consider here the process of ongoing mine closure planning, especially for amending mine closure plans and determining satisfaction of mine closure plans leading to resource tenure relinquishment.[iv] The article begins by considering core concepts of mine closure planning and the regulatory goals that inform it. It then provides a comparative overview of each State’s mine closure planning requirements under the mineral resources, environmental and land use planning laws and draws out some of the different regulatory structures and processes for mine closure within each State. The third step in our analysis compares the ways in which those laws provide for local communities’ participation in mine closure planning, with specific attention to whether the regulatory provisions create legally enforceable rights for effective community engagement. The article concludes with a summary of the key points from the discussion of three themes in our analysis: (i) the importance of clear definitions of core concepts and key goals, (ii) mine closure planning as an essential part of a mining proposal, and (iii) the legal definition of community engagement and consultation rights. Mine closure planning and implementation is necessarily influenced by many other spheres of law including taxation law, investment law, water law, and the rights of traditional owners, to name a few. A potentially directly relevant Commonwealth law is the Environment Protection and Biodiversity Conservation Act 1999 (Cth), which may require environmental impact assessment of a mining proposal and closure plan and lead to approval conditions supplementing State requirements.[v] Whilst acknowledging the importance of these adjacent spheres of the regulatory frameworks for effective mine closure planning, this article does not attempt to address their impact. In particular, the rights of Traditional Custodians are a crucial part of mine closure planning that are only briefly noted here and that would benefit from future research. WA Department of Mines, Industry Regulation and Safety, Major Commodities Review 2022-23”. Qld Government, Department of Resources, Queensland Resources Industry Development Plan, June 022. Vic Government, Department of Jobs, Precincts and Regions, Latrobe Valley Regional Rehabilitation Strategy. See L Hamblin, A Gardner, Y Haigh, Mapping the Regulatory Framework of Mine Closure, May 2022, CRC TiME, for a broader exploration of the full life cycle of mine closure regulation. In Buzzacott v Minister for Sustainability, Environment, Water, Population and Communities [2013] FCAFC 111; (2013) 214 FCR 301, [144], [227]-[230], referring to the range of approval conditions, which included mine closure. In setting conditions under the EPBC Act, the Commonwealth Minister must consider any relevant conditions under State or Territory law: at [80] citing Lansen v Minister for Environment and Heritage (2008) 174 FCR 14. Greenwashing is now a global issue Businesses and governments are now realising that being green is no longer nice to have, it’s an integral part of operations. There are also benefits, perceived and real, to both consumers and business customers to being involved in programs that are environmentally friendly or have an ethical or sustainable edge. This has given rise to a new risk - ‘greenwashing’ - that governments around the world are now grappling with. Greenwashing refers to misrepresenting a product, policy or purpose as environmental, ethical or sustainable. It applies not only to companies but also non-profits, investors or anyone seeking to represent themselves in that light. Submission - DISER Consultation Paper December 2020 ‘Enhancing Australia’s decommissioning framework for offshore oil and gas activities’ POWERING CONSUMER PROTECTIONS: WHY DECENTRALISED AND DISTRIBUTED ENERGY RESOURCES WARRANT A NEW LENS ON CONSUMER PROTECTION REGULATIONS Recent years have seen distributed energy resources usher in a new era of self-generation and reduced reliance on traditional centralised energy networks. Australian customers are increasingly enabled to access unconventional “behind the meter” energy sources and contribute to a two-way flow of energy back to the grid. Recent regulatory updates across Australia This article provides an overview of developments in the industry over the past couple of months that have occurred in several states across Australia. ARELJ - Recent Development - Principles for Exploration and Extraction Rights Showing 0 Comment Comments are closed.