AUSTRALIA Trends and Developments Contributed by: Peter Briggs, Christine Wong, Mark Smyth and Tom Dougherty, Herbert Smith Freehills
ing or deceptive conduct in relation to claims that its Glad-branded garbage bags were “made using 50% ocean plastic” . The ACCC alleged that these products were made from plastic collected from communities in Indonesia up to 50 kilometres from the shoreline and that Clorox had deprived consumers of the opportunity to make informed purchasing decisions. In Feb- ruary 2025, Clorox agreed to pay a penalty of AUD8.25 million, which remains subject to court approval. Activists have also sought to use increased regu- latory attention on greenwashing to achieve their goals. A recent example was the Environmental Defenders Office asking the ACCC on behalf of Climate Integrity to investigate whether Qantas’ “fly carbon neutral” product was misleading or deceptive and in breach of the Australian Con- sumer Law. Misleading and deceptive conduct: claims against financial institutions Large investment and superannuation funds have been the subject of all three ASIC climate litigation proceedings. ASIC has been particu- larly alert to representations about “ESG-posi- tive” investment screening. Proceedings brought against Vanguard Investments Australia ( “Van- guard” ), Mercer Superannuation ( “Mercer” ) and Active Super have focused on claims of this nature. The Vanguard and Mercer proceedings resulted in significant penalties. In September 2024, Vanguard was ordered by the Federal Court of Australia to pay a penalty of AUD12.9 million – the highest yet ordered in Australia for greenwashing. ASIC alleged that Vanguard had engaged in misleading or decep- tive conduct and made false or misleading rep- resentations about the ESG-related exclusionary screening it applied to investments in an “ethi-
cally conscious” fund. Vanguard admitted much of the alleged conduct. This decision came a month after the court ordered a AUD11.3 million penalty against Mer- cer (which had been agreed between the par- ties). The court held that Mercer had misled members of its Sustainable Plus fund by claim- ing that the fund excluded companies that were involved in carbon-intensive fossil fuels, despite heavily investing in 15 stocks in this sector. The penalty was set on the basis that Mercer’s con- traventions were serious and arose from its fail - ures to implement sufficient systems to ensure the accuracy of its claims. In the Active Super case, ASIC alleged mislead- ing or deceptive conduct against Active Super for directly and indirectly investing in securities the company had represented were eliminated or restricted by its fund. Once again, the court found in favour of ASIC, noting the language used in Active Super’s representations was unequivocal. At the time of writing, the appro- priate penalty has not yet been determined by the court. Continued importance of crisis frameworks In a complex regulatory environment, up-to-date and robust crisis management and prevention frameworks are a crucial tool for businesses to ensure they are meeting their obligations and safeguarding their operations. Businesses should consider developing detailed frameworks to respond to common incident types, includ- ing the targeting of specific assets in cyber- incidents. In September 2024, the Australian govern- ment published a revised Australian Govern- ment Crisis Management Framework (AGCMF), which outlines how the Australian government
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