Environmental, Social and Governance

We expect that both ASIC and the ACCC will maintain their active enforcement agendas against greenwashing. ASIC's 2025 enforcement priorities confirm that 'greenwashing and misleading conduct involving ESG claims'⁵ are among its priorities, and state that ASIC's work will 'span a broad range of sectors, including listed companies, managed funds and superannuation funds'.⁶ We expect ASIC to broaden its focus from sustainable finance and the superannuation and investment funds sectors to greenwashing by ASX-listed entities. The ACCC's 2024-25 enforcement priorities include 'consumer, product safety, fair trading and competition concerns in relation to environmental claims and sustainability'.⁷

From 1 January 2025, certain Australian businesses and financial institutions will be subject to the mandatory climate change-related financial reporting regime. A modified liability regime will provide reporting entities with immunity from civil claims by private litigants in respect of disclosures made in sustainability reports about scope 3 emissions, scenario analysis, transition plans and future-looking climate-related statements.⁸ However, the modified liability regime does not extend to proceedings brought by ASIC. To assist regulated entities with the transition, on 7 November 2024, ASIC released its draft regulatory guide on the sustainability reporting regime for consultation.⁹ While ASIC has the stated aim of 'supporting' the introduction of the regime, we do not anticipate this will slow down the pace of greenwashing enforcement action in 2024.

We expect that the energy regulators will continue their proactive approach to compliance and enforcement in 2025. Both the AER and the ESC's enforcement priorities for 2024-25 refer to the regulators' goal to protect and improve outcomes for 'consumers experiencing vulnerability', including improving retailer hardship policies and payment plan frameworks.¹⁰

The Federal Government's response to the review of the MSA was released in December 2024. The response set out the Government's position on the 30 recommendations contained in the review that was tabled in Parliament in May 2023 (Review) and, overall, indicated a strong commitment to strengthening the MSA with the Government having agreed, or agreed in principle, with 25 of the 30 recommendations. The Government's response focuses on accountability and enforcement rather than the introduction of new reporting requirements. The Government will consult as a priority on the introduction of penalties, as well as on new regulatory powers. It has also agreed to the Attorney General's Department examining the practicability of a procedure for the receipt and investigation of complaints regarding reporting.