Australia Update

ACCC Releases its Guidance on Making Environmental and Sustainability Claims

As previously reported by K&L Gates, the Australian Competition and Consumer Commission (the ACCC) released its long-awaited guidance on the making of environmental and sustainability claims. The guidance sets out eight principles that, in the ACCC’s view, businesses should follow when making such claims to comply with Australian Consumer Law.

The guidance follows the ACCC’s report from March 2023, where internet sweeps revealed that 57% of websites and business that were reviewed made ‘concerning’ claims about their environmental practices.

Australian Critical Minerals

The Australian Government has recently released its Critical Minerals Strategy 2023-2030, which includes additional industry funding and support for projects regarding critical minerals such as lithium, cobalt and vanadium. Critical minerals are the raw materials essential to modern technologies such as batteries, magnets, wind turbines, and solar photovoltaics.

It should therefore come as no surprise that a large number of Australian critical minerals have been announced or are being expanded in 2023. Some of these projects include:

• The Goongarrie Hub nickel and cobalt project by Ardea Resources (ASX:ARL) and a Japanese consortium;
• The Sconi cobalt-nickel scandium project by Australian Mines (ASX:AUZ); and
• Lithium Australia’s (ASX:LIT) recently announced signing of a joint-venture agreement with Mineral Resources (ASX:MIN) to develop a new plant to progress its lithium extraction technology.

See our Australia corporate alert for further information on the Australian Government’s Critical Minerals Strategy 2023-2030.

The Rise of Sustainable Finance

According to figures from Bloomberg, the global environmental social governance (ESG) market will be worth approximately US$53 trillion by 2025. To put that into context, this means that about one third of all assets under management will be viewed through at least one facet of ESG. To reflect this growing trend, 83% of Australians expect their bank account and superannuation to be invested responsibly and ethically.

Record funds under management (FUM) Streak for Australian Ethical Investment

Despite the debate surrounding "woke capital" in the United States, it does not appear to have made an impact on the growth of ethical investing in Australia. Australian Ethical posted a 48% increase in its FUM for the 2023 financial year, pushing its total assets under management to AU$9.2 billion. The firm’s FUM as at 31 May 2023 reached a previous record of AU$9.02 billion, indicating a pattern of continuing growth.

Australian Ethical's returns performance of AU$266 million during the June quarter outpaced its net funds inflow of AU$172 million for the same quarter. Further, the past financial year saw strong headline growth with total customer numbers increasing by over 50% since 30 June 2022 to more than 127,000 at 30 June 2023.

BHP Signs Memorandum of Understanding (MOU) With Toyota to Reduce Vehicle Emissions

Through joint press releases, BHP and Toyota Australia announced on Thursday, 3 August 2023 that the parties signed a MOU to help reduce BHP’s vehicle emissions at its mining operations in Australia. Toyota’s engineering team will work directly with BHP to assist electrification of BHP’s vehicle fleet and otherwise support BHP’s decarbonisation goals.

The View from Abroad

New Zealand to Introduce Modern Slavery Act

After concluding a consultation process that started in 2021, New Zealand’s Deputy Prime Minister Carmel Sepuloni announced on 28 July 2023 that legislation combatting modern slavery (MS) will be introduced in parliament. While the legislation is currently drafted, the government previously provided a summary of how it expects the legislation to function. The key aspects include that it provides for a tiered model of compliance obligations based on annual revenue. In short:

Implementing Practical ESG Practices Throughout the Supply Chain

Global consultants A&M recently released the report Untangling the Complexities of ESG with Strong Supply Chain Models. The report discusses the need for effective solutions to streamline ESG practices. The report is particularly helpful as it provides practical ESG strategies that could be implemented throughout a company’s supply chain. A&M states that the strategies "aim to enhance organisational ESG performance, mitigate risks and align with the evolving expectations of stakeholders".

Global Boiling: July Temperatures Shatter Records

According to the World Meteorological Organization, the first three weeks of July were the hottest weeks and 6 July was the hottest day on record. This was a result of large heatwaves in North America, Asia and Europe. According to the Bureau of Meteorology (BOM), many Australian capital cities have been experiencing unseasonably warm winters with average temperatures being up to 8•C higher than the average for July.

Climate change has been the main cause for these excessive temperatures, with the UN Secretary-General António Guterres declaring that we have entered an era of "global boiling". International climate experts have warned that these extreme heatwaves should not be viewed as unusual and will become more common due to climate change.

At the same time, BOM announced the expansion of its climate tool to help support more farmers, and the new UN Global Climate Litigation Report 2023 has revealed that Australia ranks first internationally for prevalence of climate-related lawsuits (127 cases as at 31 December 2023).