REPORT
Risky Influence: The legal implications of misaligned climate-related lobbying by Australian companies
We compared Australian companies’ climate commitments to their actual lobbying activities, here's what we found...
AGL
•
BlueScope
•
Coles
•
Origin
•
Qantas
•
Rio Tinto
•
South 32
•
Telstra
•
Woolworths
•
AGL • BlueScope • Coles • Origin • Qantas • Rio Tinto • South 32 • Telstra • Woolworths •
Australian companies are vulnerable to legal risk due to the misalignment between their public claims to support climate action and their direct and indirect lobbying activities to water down, delay or block climate reforms and policies.
KEY FINDINGS
Leading Australian companies are obstructing and delaying Australia’s transition to net zero by directly and indirectly lobbying against the policies required to meet our obligations under the Paris Agreement and reach net zero by 2050 or sooner.
Companies are lobbying against climate action despite having made repeated public declarations in support of limiting global warming to 1.5C and the goals of the Paris Agreement.
All companies included in this analysis are exposed to legal risk of misleading consumers and investors where there is misalignment between their top-line claims of support for climate action and their direct and indirect lobbying activities and engagement.
Indirect lobbying via industry associations was identified as the greatest source of misalignment. For example, during consultation on the Safeguard Mechanism Reforms, both AGL and Rio Tinto stated their support through consultation submissions or top-line messaging, while the Business Council of Australia - of which both companies hold membership - was engaged in active opposition to the proposed reforms.
Board directors in the majority of companies do not have direct oversight of direct and indirect climate lobbying, exposing company directors to legal risk.
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Management must be accountable for delivering on these [net zero] pledges. This means publicly advocating for decisive climate action and disclosing all lobbying activity.
Catherine McKenna
Chair, UN High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities
Legal Opinion: Corporate Risks of Misaligned Lobbying
The expert legal team at the Environmental Defender’s Office has produced a legal opinion on the potential legal risks for companies that make net zero commitments and then undertake lobbying – whether directly, or indirectly via industry associations – that is misaligned with those commitments.
There are several risks associated with a company making a net zero commitment and then undertaking lobbying that is misaligned with that commitment, including the following.
There are risks of actions against the company for misleading or deceptive conduct under the Corporations Act 2001 (Cth) (Corporations Act), Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) or Australian Consumer Law (ACL) (Schedule 2 of the Competition and Consumer Act 2010 (Cth));
Risks associated with increased shareholder advocacy using provisions in the Corporations Act; and
Overseas there have also been tort-based claims against companies involved in serious climate misinformation.
Case Study: Lobbying Impacts Climate Disclosure Laws
Close scrutiny of lobbying activity from the companies assessed in this report and their trade associations exposes an increasingly common and harmful trend. Whereby companies express public, positive support for climate action while simultaneously lobbying, both directly and indirectly via industry associations, for carve outs and changes that weaken and delay proposed climate laws and ultimately reduce their effectiveness as tools to reduce emissions.
In 2022, the Australian Government announced its commitment to standardised, internationally‑aligned requirements for disclosure of climate‑related financial risks and opportunities in Australia. The Treasury undertook three rounds of consultation on improving the quality of climate-related financial disclosures through mandatory requirements for large businesses and financial institutions.
Lobbying by corporations and their industry associations sought to delay climate-related financial disclosure reforms and broadened corporate immunity in a thinly veiled attempt to slow climate action.
Considering the multiplier effect of policy changes like these - with this influence exerted on every consultation and proposed bill - it slams the brakes on Australia’s climate response.
