Radio silence replaces greenwashing claims

Australian companies are walking back their public commitments to climate action as part of a growing global trend known as “green hushing”.

With Australian regulators now cracking down on alleged greenwashing, companies have been put on notice that they face an increased risk of legal action for false claims.

AustralianSuper’s climate report.

The biggest superannuation fund in the country, AustralianSuper, removed its climate report from its website on March 22. The copy on the website where the report used to sit now says: “We are currently updating our climate change report. A new version will be available soon.”

A “net zero by 2050” fact sheet, which included a commitment to active ownership to drive climate action, was removed from AustralianSuper’s website in March.

An AustralianSuper spokesman said the fund continually reviews and updates its website to comply with a “rapidly changing regulatory and investment environment”. “The updated disclosures on the website reflect the Fund’s active stewardship of its assets in relation to climate change,” he said.

UniSuper recently removed a reference to its commitment to “continually improve our disclosure of our carbon footprint and the ‘glide-path’ to net zero” which appeared in its 2022 climate risk report in a revised 2023 version. References to how the fund calculates its carbon intensity and more than 10 pages that outline the carbon footprint calculations for investment options have also been removed.

Another fund, Active Super removed its 2022 Responsible Investment report from its website on March 2 after publishing it in late December.

“Active Super notes the updated ASIC guidelines and increased focus on ESG disclosures, and we are currently undertaking a process to review ESG-related materials,” a spokesman said.

“We review our disclosures, policies and investments as ESG reporting, data and investment evolves.”

Acting executive director Market Forces Will van de Pol said his organisation had noticed companies removing climate action commitments in the last couple of months.

“We’ve seen a number of instances of Australian super funds pulling down climate disclosures and members are rightly concerned to see super funds walking back climate disclosures and commitments,” he said.

“It’s great to see regulator scrutiny and accountability on these issues, but companies shouldn’t be responding by lowering their ambition. They need to put in the work to actually live up to their climate commitments.”

Many companies have publicised their commitment to climate action in response to consumer and shareholder demand. But Australian regulators have started holding them to account for alleged greenwashing which involves making false or unfounded claims about sustainability and climate action. Companies going quiet about their emissions-reduction goals are said to be “green hushing”.

The BHP board recently said shareholder proposal calling for greater advocacy on climate action would carry a legal risk.

“The risk of legal action by regulators, NGOs and other interested parties in relation to greenwashing is now significant, and the Board does not consider it appropriate to unnecessarily expose the Group to that additional risk,” a BHP report states in its last annual general meeting notice.

Woodside Energy has also highlighted potential litigation risk in its 2022 Climate Report. A Woodside spokeswoman said it had identified potential key climate-related risks but “this does not necessarily mean that the risks have materialised in practice or that the mitigations are currently being pursued”.

A BHP spokeswoman pointed to chair Ken MacKenzie’s AGM comments last year when he said the company was “very aware of the concerns around greenwashing” and not certain of the pathway to get to decarbonisation. “You should think of it as an ambition, as opposed to a commitment to get there. But it shouldn’t be interpreted as a lack of ambition because we’re doing a lot of work with our downstream steel customers in order to reduce the emissions of the supply chain,” he said.

Last year, the Australasian Centre for Corporate Responsibility (ACCR) launched legal proceedings in the Federal Court alleging that Santos Ltd has breached the Corporations Act 2001 (Cth) and the Australian Consumer Law by engaging in misleading or deceptive conduct relating to its “clean energy” claims and its Net Zero plan in its 2020 Annual Report.

ASIC launched its first civil legal action against alleged greenwashing in the Federal Court against Mercer Superannuation (Australia) late last month. The ACCC is also investigating a number of businesses for potential “greenwashing”, following an internet sweep which found more than half of the businesses reviewed made concerning claims about their environmental or sustainability practices.

The World Economic Forum has reported on the emergence of green hushing, citing a consultancy South Pole survey which found that nearly a quarter of 1200 firms it surveyed do not plan to publicise their science-based emissions targets.

Harriet Kater from the Australasian Centre for Corporate Responsibility said it was seeing a correction in the market after a “prolonged period of greenwashing without consequence”.

“The fact that corporations are deploying greater vigilance around their disclosures and claims is positive and should not be interpreted as a backwards step,” she said. “However, there are instances where companies have used greenwashing risk as a reason to not increase their ambition, which we view as a mere excuse.”

The Australian Institute of Superannuation Trustees declined to comment.

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