Criminal Culpability for Corporate 'Greenwashing'

As greenwashing concerns surge, new report declares existing criminal code sufficient, rise in enforcement inevitable.
Nov 1, 2022 11:10 AM ET
New briefing: An Overview of Existing Criminal Culpability for Corporate 'Greenwashing'
New briefing: An Overview of Existing Criminal Culpability for Corporate 'Greenwashing'

SYDNEY, November 1, 2022 /3BL Media/ - Today, FairSupply, an Australian ESG data provider and consultancy, released a new briefing: An Overview of Existing Criminal Culpability for Corporate ‘Greenwashing’.

“This new briefing makes it abundantly clear that, a company should not declare that it will operate on ‘net zero basis’ or have supply chains that are ‘slavery free’ at some future point unless there is a clear, evidence-based foundation from which it can justify the assertion of such aspirational future intentions,” says human rights lawyer Kimberly Randle, CEO, FairSupply

The lack of clarity around disclosure requirements for ESG reporting has allowed for the proliferation of ‘greenwashing’.

Despite legitimate calls for the introduction of new offence and civil enforcement provisions to specifically address the concerning trend of greenwashing, these measures are not essential to achieve appropriate enforcement in the current context. A sufficiently robust calendar of criminal offences already exists.

The real issue appears to be an increased uptake in the administrative discretion to pursue enforcement through existing legal avenues, including prosecution.

In Australia, regulators such as ASIC and the ACCC are taking notice, with the ACCC warning they will not hesitate to take enforcement action.

Potential criminal liability for false and misleading representations is not limited to inaccurately describing (including by omission) the past or present risks, steps in mitigation, or other approach to ESG-issues that a company has taken, or is taking. Rather, future representations made publicly by companies in relation to ESG-related commitments can fall afoul of enforcement provisions if those representations lack a reasonable basis at the time they are made.

Download the report here

Media enquires: Andrew Starr - andrew@fairsupply.com.au

FairSupply is a fast-growing, cutting-edge global ESG data provider and consultancy. Through world-leading proprietary technology, we provide our business and institutional clients with unparalleled visibility over ESG risk along their entire supply chain. In 2021 Minderoo Foundation invested in FairSupply to empower business to assess and mitigate modern slavery risk across their supply chain and investment portfolios.

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