The REP Wrap: UK’s greenwashing watchdog warns it could fine 10% of turnover
Your weekly summary of corporate sustainability news.
The UK’s Competition and Markets Authority (CMA) has warned that greenwashing could cost companies up to 10% of their global turnover in the future. The body wrote to fashion retailers this week “to highlight the need for businesses to consider their obligations under consumer protection law”, following an investigation into alleged greenwashing by ASOS, Boohoo and Asda. It urged fellow retailers to “familiarise themselves” with the existing Green Claims Code, and said it would publish sector-specific guidance in due course. It also noted that if the UK adopts its Digital Markets, Competition and Consumers Bill, companies found to be in breach of consumer protection laws could be fined up to 10% of global turnover. “Future action by enforcers, including in respect of misleading green claims, could therefore result in the imposition of a penalty,” the letter warned.
A Korean campaign group has suggested that the recent exodus of foreign investors from steel giant Posco could be down to sustainability concerns. In a report this month, Solutions for Our Climate said the fall in Posco’s overseas ownership, from 52% in January 2023 to 28%, could be because of broader business decisions, but “quick desktop research” indicates it might be linked to its lax approach to the climate transition. Posco has a 2050 climate target, but no detailed plan to achieve it, and subsidiaries with coal expansion plans. Dutch asset manager Robeco added the firm to its exclusion list last month citing “failing climate standards”. Other European investors, including SEB, Nordea and Achmea, have sold their holdings because of a perceived breach of global norms.
The UK Government has rejected a recommendation from the Environmental Audit Committee to ban companies from trading in products linked to deforestation, even if those products come from places where deforestation is legal. It disagreed with the advice, arguing that “the only way to achieve zero global deforestation in supply chains is to work in partnership with producer countries – and that working in partnership requires us to uphold and respect national laws”.
Australia has this week tabled a bill to amend the Corporations Act so that it includes climate-related financial disclosure rules. As part of the requirement to prepare annual financial reports, companies will be required to produce “a new annual sustainability report” including climate information. The Australian Government also introduced a bill this week to establish a new legal body to promote the transition to a net-zero economy, which will work with industry as well as local authorities and stakeholders.
TotalEnergies has had its lawsuit against Greenpeace thrown out by the French courts. Greenpeace France had published a report estimating that the energy giant’s emissions were four-times what it said they were. Total has previously said that the NGO’s calculations were “at the very least, dubious”, arguing that they ‘double-counted’ its Scope 3 emissions. It wanted the Paris judicial court to rule the report “false and misleading” and force its withdrawal. But this week, the judge decided the summons was too vague to allow Greenpeace to defend itself against the claims.