Misleading and deceptive conduct in financial services with reference to emission reduction commitments: Seeing the wood for the trees

Enforcement action for misleading and deceptive emission reduction statements has so far mostly used s 1041H of the Corporations Act 2001 (Cth). This article argues that s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) is a better option for private and public enforcement of misleading and deceptive representations about emission reduction commitments of corporations. The main reasons for this view are that: s 12DA is served by s 12BB, which puts an evidentiary burden on the respondent to show that representations about future matters were made on reasonable grounds; and the remedies attached to s 12DA are broader. The adoption of the Australian Law Reform Commission’s recommendations for the simplification of these provisions is supported, with the inclusion of s 12BB in its current form. It is suggested that emission reduction statements made before the commencement of mandated climate-related financial disclosures already benefited from ample scientific guidance of what would be objectively reasonable. There is some evidence that applicants are already making use of scientific guidance in framing their complaints.