Companies ‘greenhushing’ to avoid scrutiny of climate goals, Asic says
Practice allows companies to claim to have good environmental policies without having them tested, according to Australias corporate watchdog Companies may be tempted to hide their climate goals over fears they will be scrutinised in an emerging global trend known as greenhushing, the corporate regulator said on Monday. The practice allows companies to claim to have good environmental, social and governance (ESG) policies without having them tested, Australian Securities and Investments Commission (Asic) chair, Joseph Longo, said. Sign up for Guardian Australias free morning and afternoon email newsletters for your daily news roundup Domestically, weve observed some commentators and firms saying, in effect, we have such a good ESG policy, but we cant say anything about it because the regulators wont let us, Longo told the AFR ESG summit in Sydney on Monday. The reality is the critics are right: this kind of response is just another form of greenwashing; an attempt to garner a green halo effect without having to do the work. The term greenwashing refers to the practice of misleading or overstating a companys ESG policies which has attracted the attention of regulators . Longo said ESG reporting was part of a series of important moves towards greater transparency and higher disclosure standards for investors. A report by Swiss consultancy South Pole found last year that an increasing number of companies are no longer publicly talking about their climate practices, even when they have developed science-based targets. Greenhushing makes corporate climate targets harder to scrutinise and limits knowledge sharing, the report said. Many Australian companies, including those involved in coal, oil and gas production, have public climate policies that state their support for the Paris agreement to limit global warming to 1.5C above pre-industrial times. Sign up to Morning Mail Our Australian morning briefing breaks down the key stories of the day, telling you whats happening and why it matters after newsletter promotion However, some have come under heavy criticism given their policies allow for the development of new fossil fuel reserves. According to Intergovernmental Panel on Climate Change analysis following the landmark 2015 Paris agreement, greenhouse gas emissions from existing fossil fuel infrastructure are more than enough to push the world beyond its climate goals. Longo said there were four main categories that represented problematic greenwashing behaviour in Australia. Those include: having net zero targets without a reasonable basis of achieving it; using terms like carbon neutral when not warranted; overstating sustainability investment screens; and the use of inaccurate labelling or vague terms. Longo said that ESG disclosures were important given investors were increasingly relying on them to make decisions.