Regulators in the Asia-Pacific region are ramping up scrutiny on companies that may be overstating their environmental credentials.
(Bloomberg) — Regulators in the Asia-Pacific region are ramping up scrutiny on companies that may be overstating their environmental credentials.
Australia is reviewing at least 140 businesses for potential greenwashing after an internet sweep found 57% of firms had made “concerning claims” about their environmental and sustainability practices, its consumer watchdog said Thursday.
That comes less than a month after South Korea’s government issued warnings to some of the nation’s biggest energy and steel companies over misleading climate claims and after Japan strengthened the rules on which funds can label themselves “ESG.” Meanwhile India’s securities watchdog released a framework of ESG reporting requirements for listed entities in February, after disclosure rules for retail ESG funds took effect in Singapore at the start of this year.
Of the 247 businesses targeted by the Australian Competition and Consumer Commission in its sweep, the cosmetic, clothing and footwear, and food and drink sectors had the highest proportion of vague or misleading claims, the ACCC said. The commission has a history of combating greenwashing claims, and has extended into new areas, targeting misleading endorsements by social media influencers and challenging Alphabet Inc.’s Google over privacy policy.
“Businesses using broad claims like ‘environmentally friendly’, ‘green’, or ‘sustainable’ are obliged to back up these claims through reliable scientific reports, transparent supply chain information, reputable third-party certification or other forms of evidence,” ACCC deputy chair Catriona Lowe said in a statement. “Where we have concerns, we will be asking businesses to substantiate their claims.”
Asia’s clampdown on corporate greenwashing comes amid increasing pressure from the public and activist groups, and actions by regulators outside the region.
That heightened scrutiny may be pushing firms to shy away from promoting their green credentials as they fear the stigma associated with allegations of exaggerated green claims, according to South Pole, a climate consultancy and carbon offsets developer. The trend, known as “green hushing,” has been spreading among companies despite improvements in their climate commitments, according to its 2022 survey.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.