ESG, greenwashing and ASIC: how can clients mitigate risk?

In this video, partners Harry New and Jacob Uljans discuss ASIC’s focus on ESG and greenwashing, and what clients should do to mitigate risk, including ensuring public disclosures around environmental and social claims are accurate and properly vetted.

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Harry New and Jacob Uljans


[Harry New:] One of ASIC’s top stated priorities is greenwashing, and therefore [it] is conducting surveillance on all manner of materials that are making disclosures around ESG. So, it’s websites, it’s marketing material, it’s advice, it’s formal documentation – like product disclosure statements and continuous disclosures.

[Jacob Uljans:] We have observed ASIC announcing recently that it has commenced 35 actions in the current financial year concerning greenwashing, ranging from obtaining corrective disclosures through to issuing infringement notices and – in one case – commencing civil penalty proceedings. We expect to see significant ongoing activity in this space from ASIC and likely the commencement of additional civil penalty actions in the near future.

[Harry New:] Clients are nervous. ESG is a huge topic and they know it, and they know that ASIC is very, very focused on it. ASIC is looking to make examples, and that is clear from all of our interactions with ASIC.

[Jacob Uljans:] One thing we are seeing in the context of engaging with ASIC is ASIC taking a quite forthright position in relation to its requests that disclosures be amended, even when the disclosures themselves are not misleading. Businesses are increasingly aware of the risks associated with greenwashing, and one of the things that we are seeing is an increasing trend towards what’s become known as ‘green hushing’, which is where businesses, rather than overstating their environmental or social credentials, actually understate or not disclose at all. And while that may – in the long-term – result in less overstatement or misrepresentation around ESG matters, it can also have a negative impact insofar as businesses are just not talking about the steps that they are taking to comply with climate expectations and otherwise ensure that their environmental and social activities are being recognised.

[Harry New:] Clients just need to be vigilant. They need to make sure that every disclosure that will be public facing, customer facing, really needs to be properly vetted and some kind of due diligence process needs to be undertaken to make sure that it is accurate. Because if not, there can be quite dire consequences, particularly from a reputational perspective, but also necessarily from a monetary perspective.  


Harry New

Harry leads our financial services team and focuses extensively on financial services law and corporate advisory.

Jacob Uljans

Jacob is a commercial dispute resolution lawyer, acting for clients in contractual disputes, corporations and equity matters.

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