The ACCC is not the only body looking into environmental claims made by businesses and companies. Companies that may not deal with consumers in a manner that attracts the attention of the ACCC, may still fall foul of the Australian Securities and Investments Commission (ASIC).
Learn about ACCC’s takes on greenwashing claims.
ASIC issues infringement notices to energy company
Listed energy company Black Mountain Energy Limited (BME) paid $39,960 pursuant to three infringement notices issued by ASIC in relation to sustainability-related statements made to the ASX between 23 December 2021 and 8 September 2022, including that:
- BME was creating a natural gas development project with ‘an industry-leading ESG scorecard’ and ‘net-zero carbon emissions’; and
- the project would be designed to ‘minimize carbon emissions on site’.
The infringement notice outlines that ASIC alleges the statements made representations to investors regarding the standard, quality, value or grade of services (BME’s securities) “namely that the services were an investment in a company whose project was being developed to, and would, produce natural gas with net zero carbon emissions.”
Black Mountain Energy’s false claims about greenwashing
At the time of making the statements, ASIC alleges that they were false or misleading for a variety of reasons set out in the infringement notice, including because BME:
- had not progressed any specific works related to its net zero aim and had not allocated funding for such works;
- had not progressed any specific designs of the project and how it would minimise or eliminate carbon dioxide emissions or attain net zero carbon emissions;
- had not undertaken any specific modelling of carbon dioxide emissions that were likely to be generated by the project which would be required to be offset, nor any substantive modelling of the costs of offsetting; and
- had no credible basis for asserting that the natural gas it produced would be carbon neutral.
Businesses should ensure environmental claims are accurate
It is a timely reminder for all businesses and companies to make sure that environmental claims made in the course of business, including in investor presentations, are accurate to current circumstances and capable of being supported with evidence. Where representations are made to a future state of affairs, particularly when trying to attract investment, companies should be careful in making sure they have a credible basis for making statements regarding the matters they are making representations about.
If you have any concerns or would like advice regarding sustainability claims, our team is here to help. Call our experienced business lawyers on 1300 80 67 80.