Kylea Tink (North Sydney, Independent) Share this | Hansard source

by leave—I move amendments (1) and (2), as circulated in my name, together:

(1) Schedule 4, item 26, page 255 (after line 19), at the end of subsection 296A(1), add:

Note: A requirement to include something in a sustainability report is separate to any other reporting requirement in this or any other Act, and does not affect that other reporting requirement.

(2) Schedule 4, item 145, page 284 (lines 18 to 20), omit subparagraph 1707D(3)(b)(iii).

While I welcome this legislation, as outlined in my second reading speech my community and I are concerned that, as it currently stands, it includes a broad modified liability approach for the commencement of sustainability reporting for the first three years of the scheme. While the government argues that this is designed to ensure reporting entities, auditors and directors are allowed time to develop experience and practice to report in line with the required standards, the Senate Economics Legislation Committee inquiry found many experts had concerns regarding the inclusion of a three-year modified liability. In many instances, their concerns were tied to the fact that in Australia we already have high rates of corporate greenwashing, with at least one in two companies surveyed by the ACCC in 2023 having been found to be promoting concerning claims about their environmental credentials.

The right for third parties and consumers to hold companies, businesses, governments and individuals to account for making false or misleading statements is crucial not only to our society's general health but specifically to the proper functioning of any market. At a time when urgent climate action is critical and consumers and communities are demanding faster action to regear our society towards a future-focused economy, it's essential entities are held to account for greenwashing and promoting false solutions to the climate crisis. We are so far behind the rest of the world when it comes to adopting this reporting framework. Many of the companies that will be covered by the proposed modified liability arrangements here in Australia are actually already working to them in other markets. At the same time, many have voluntarily been reporting on climate-related risks in Australia also. Beyond those two facts, the truth is that the government has been signalling that this reform was coming, and the entire economy has had sufficient notice of proposed reporting requirements.

For this legislation to be as effective as it can be, my community argues that it should include a higher standard for those companies that have already begun to report in this way, while allowing room for the development of competency among those businesses which may be stepping into this reporting model for the first time. We agree that some form of indemnity provisions would be appropriate given the scale of this reform, and transitional measures would encourage more fulsome reporting and proper understanding of the requirements by companies and directors. We agree that we need to get the balance right. But we also argue that we should go as far as fast as we can, as we are already so far behind other markets, and we should not excuse wanton abuse to date by building an escape hatch for those businesses who should know better.

The amendments that I am proposing remove immunity relating to transition plans, while retaining the rest of the bill's modified liability plan. Transition plans are company-led initiatives which are based on company business models. The integrity of these plans is important for investors and capital allocation, and any information contained within them should be considered to be of the highest calibre. In the exposure draft of this legislation, the only statements covered by the three-year immunity from private litigant action were those made in the sustainability report about scope 3 greenhouse gas emissions and scenario analysis. The exposure draft did not prevent third parties from taking action in relation to a company's transition plan, meaning it would have been open to third parties, including investors, to take action against a company for making misleading statements in relation to its climate transition plan. Following a period of public consultation on the exposure draft, the federal government made two amendments which significantly broadened the scope of the immunity provisions to include transition plans and any forward-looking statement made in a sustainability report during the first year of the regime. In doing so, the government strengthened the protection for entities against liability for greenwashing. I fear that has left many of us concerned that there are indeed businesses currently in our market making false claims, and they are being told they are getting extra time to tidy their house.

The inclusion of transition plans in the immunity provisions is a significant departure from both the proposals in the exposure draft and the general application of misleading and deceptive conduct provisions in the Corporations Act, the ASIC Act and the Australian Consumer Law. Given that any business already presenting these transition plans has developed a level of proficiency in their creation, they should not be able to tap into immunity from private litigation. I commend my amendments to the House and thank the minister and his team in advance for considering them seriously.

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