Advocacy group pushes for reduced legal immunity in climate disclosures bill
Climate Integrity has urged the government to agree to amendments put forward by the Greens that would see reduced legal immunity for corporations.
Advocacy group Climate Integrity is encouraging the government to adopt amendments proposed by Greens senator Nick McKim that would reduce the time that legal immunity is available to companies for mandatory climate reporting.
The amendments to Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 proposed late last month, would reduce legal immunity from three years to one.
The bill, aimed at improving and mandating corporate climate disclosures, currently provides legal immunity to companies making false or misleading statements for three years.
Climate Integrity said that without the right to take legal action against entities for making misleading climate statements, Australia is unlikely to see "accountability, reporting best-practice, or science-based emissions reductions".
The advocacy group said its recent report Net Zero Integrity: Assessment of the Net Zero Pledges of Australian Companies showed that many of the companies assessed are not on track to meet their publicly stated emission reductions and net zero commitments.
"Without strong legislative and regulatory changes, these low-integrity practices will continue," Climate Integrity said.
"A three-year immunity window will only see a continuation of greenwashing in company reporting and delay much-needed climate action."
Climate Integrity director, Claire Snyder, said civil society is a vital watchdog in challenging corporate power and plays an important role in driving accountability and holding corporate actors responsible for their climate impacts.
“For the next three years, it could be legal for greenwashing companies to mislead customers with inaccurate net zero claims - if the government bill passes the Senate in its current form," Snyder said.
“Corporate greenwashing in net zero pledges is widespread and legal action has been critical to hold companies to account. A three-year legal immunity loophole is bad news for consumers, investors and our climate and we support its reduction to 12 months.”
Independent member for Wentworth, Allegra Spender, also previously voiced concerns about the modified liability provisions in the bill which protect entities from legal action in the first three years of the new bill.
“ASIC will still be able to bring actions against businesses for claims that are misleading or deceptive, but the right of third parties, including investors, to do this has been removed," Spender said.
Spender warned this could weaken the legal checks and balances of the reporting and may undermine the policy intent of the new regime.
Large ASX-listed companies such as the group 1 entities captured by the bill already have the resources to comply with the new requirements as many have already been making similar disclosures for some time, she noted.
Spender said she did, however, have sympathy for the medium-sized businesses such as the group 3 entities covered by the bill.
“As a former small-business person, running a small business myself, I don't underestimate the challenge of meeting new reporting requirements. When you're cash-strapped and short-staffed it won't always be easy to get your sustainability disclosures right the first time.”
