THE Australian Competition and Consumer Commission released survey results earlier this year of 247 businesses or brands, across eight sectors, finding that 57 per cent of them had promoted “concerning claims about their environmental credentials”.
Then in May, the Australian Securities and Investments Commission released a short report on the 35 interventions it had made into organisations that had been guilty, or at least run very close to the line, of ‘greenwashing’.
Greenwashing is defined as “the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical”. Read more closely into the subject of sustainability reporting and environmental, social and governance practices, and it is clear greenwashing is high on the priority list of regulators – with the threat of timely corrections, through to the issuing of public infringement notices and/or civil penalty proceedings, within their remit of enforceable actions.
There is no question deliberate acts to mislead or overpromote green credentials should be called out, but have the regulators struck the right balance between stick and carrot, to drive responsible leadership in the realm of sustainability across all sectors?
Does the threat of being penalised for communication or reporting run the risk of driving some organisations to a position of inaction on sustainable practices, rather than proactivity?
We seem to hear a lot about those that overstep the mark on the issue of greenwashing. It would be great if there was at least as big an emphasis on those organisations, industries and sectors that are leading the way in sustainability and taking others along with them.
‘Greenhushing’, when organisations choose to not fully communicate their sustainability efforts to avoid scrutiny and/or the fear of public backlash, may push some industries back into their shell, at a time when, according to the experts, leadership and positive action is critical.
The United Nations’ proclamation that July 2023 may be the hottest month ever recorded, suggests the urgency around climate action requires an all-hands-on-deck approach.
UN Secretary-General Antonia Guterres captured world headlines when he warned that “the era of global warming has ended” and “the era of global boiling has arrived”.
Mr Guterres went on to say, “leaders must lead”, there was “no time for hesitancy” and “no more waiting for others to move first” on climate action.
Based on this, it seems that whatever your industry, and whether the requirement to report on sustainability and climate actions under the Corporations Act is looming, or further down the road, everyone should be pulling their weight.
But will the threat of regulatory penalties, or the risk of being shamed for communicating an ambition and starting the journey, give rise to some industries holding back on taking positive action on climate and sustainability? Take sport, for example.
When it comes to leadership and the ability to drive positive action on the issues affecting our communities, sport brings an unrivalled capacity to influence across its various stakeholder groups.
While an athlete’s primary focus is to compete and achieve success, their ability to inspire fans and drive actions beyond the field of play is very powerful.
Based on guidance from government, most large, national sporting organisations will not be required to make mandatory climate disclosures until at least 2026-27.
But it seems we could do with this sector’s leadership and action to drive positive influence and change within our community far sooner than that.
One of the challenges facing well-intentioned sporting organisations is the complexity and alignment of frameworks and standards from which to build a meaningful sustainability strategy.
Internally navigating the moving target of an evolving landscape of global standards and reporting may potentially overwhelm these efforts, before reaching a point of confidently capturing and reporting on climate action and sustainability.
When you consult experts in this area, the consensus view is certainly consistent.
Getting started, understanding impacts, setting benchmarks and making changes, sooner rather than later, is key.
The trick for sport will be in building and communicating a strategy for positive action on climate, and other sustainability initiatives, without attracting the ire of regulators or the noise of cynical activists.
What we don’t need is a pervasive culture of inaction.
• John Gardner has spent more than 25 years consulting to the business, NFP and sporting sectors.
By John Gardner
