Greatest Good Regulatory Update May 2023
Greenwashing/impact washing
ASIC Issues Report on Greenwashing findings
ASIC released a report outlining its regulatory interventions into greenwashing made between 1 July 2022 and 31 March 2023. ASIC encouraged issuers and advisers to consider this report and the questions and principles in Information Sheet 271 (How to avoid greenwashing when offering or promoting sustainability-related products), when preparing disclosures. Whilst this report is aimed at the finance sector, there is a lot for the social sector to consider.
ASIC highlighted the following results:
• 23 total corrective disclosure outcomes
• 11 infringement notices issued
• 1 civil penalty proceeding commenced
In the managed funds sector, 14 responsible entities amended their disclosures in 21 Product Disclosure Statement (PDSs) and one fund’s name was changed.
In relation to listed companies, 9 entities amended disclosure documents, company websites or market announcements. ASIC provided examples of its regulatory interventions with reference to the following themes:
• Net zero statements and targets
• Use of terms such as ‘carbon neutral’, ‘clean’ or ‘green’
• Fund labels
• Scope and application of investment exclusions and screens
For FY23-24, ASIC advised that it would be progressing its surveillance on the superannuation fund sector and the wholesale green bond market, and will continue its surveillance of the managed fund and corporate sectors. ASIC is continuing to investigate several entities in relation to suspected greenwashing and it anticipates further enforcement action.
Greenwashing by businesses in Australia - findings of ACCC's internet sweep
The ACCC also released a summary of it's greenwashing enforcement following a recent internet sweep examining the sustainability claims of 247 business across eight sectors which found that 57 per cent of all businesses surveyed made potentially greenwashing claims.
AICD Issues a Climate Governance Framework for NFP Directors
How can your board start the journey to net zero? Our new practical guide published by the AICD and PwC, complete with case studies, can assist NFP directors to address climate change governance and improve the carbon footprints of their organisations. With many NFPs facing higher demand for services due to climate change, this guide provides a simple roadmap.
Philanthropic Alliance
An alliance of some of Australia’s largest philanthropic foundations has launched to grow impact investing in Australia, enable partnerships, and unlock its potential to help tackle social and environmental challenges.
Annual Wage Review Decision
The Fair Work Commission has today handed down its annual wage review decision.
The Commission has decided to increase the minimum wages in all modern awards by 5.75%. These increases will take effect from the first full pay period commencing on or after 1 July 2023.
The National Minimum Wage has also been increased from $21.38 per hour to $23.23, an increase of 8.65%.
The Commission also indicated that it will soon commence work to address what it identified as significant issues concerning the potential gender undervaluation of work in modern award minimum wage rates applying to female-dominated industries and occupations.
Changes to Modern Awards
The minimum wages in all modern awards will be increased by 5.75%. These increases will take effect from the first full pay period commencing on or after 1 July 2023 for all modern awards. This represents a departure from previous years where the Commission has staggered the implementation of the increases in response to the COVID-19 pandemic.
Changes to the National Minimum Wage
The Commission took a two-step approach to the National Minimum Wage.
The National Minimum Wage has traditionally been linked to what is known as the C14 wage level - an introductory/training wage contained in certain modern awards. The Commission determined that this was no longer appropriate and indicated that the minimum wage should instead be alligned to the C13 wage level, which is the lowest classification rate applicable to ongoing employment in most modern awards.
The Commission decided that, in addition to the change in alignment, the National Minimum Wage should also be increased by 5.75%.
When combined, the change in alignment and the 5.75% increase result in the National Minimum Wage increasing from $812.60 per week or $21.38 per hour to $882.80 per week or $23.23 per hour, a combined increase of more than 8.6%.
Casual award/ agreement free employees are also covered by a default casual loading which remains at 25%.
Gender Equality Issues
The Commission also stated that the scope and timing of the present review had prevented it from addressing what it considered to be significant issues concerning the potential gender undervaluation of work in modern award minimum wage rates applying to female-dominated industries and occupations.
It announced that it will soon commence a research project to identify occupations and industries that may be subject to such undervaluation, and that this project will be used to underpin future proceedings.
While no further specific details were announced, the Commission put all parties on notice that “the timely resolution of these gender equality issues is firmly on the Commission’s agenda”.
When are the changes effective?
The changes come into operation from the first full pay period on or after 1 July 2023.
Employers should ensure that employees who are paid in accordance with a modern award or the National Minimum Wage receive the appropriate pay increase by the relevant, effective date.
Employers who do not pay strictly in accordance with award terms (e.g., those that pay above award rates, annualised salaries or ‘flat rates’ of pay) should ensure that their payments will still satisfy all their obligations under the relevant award/minimum wage once the increases apply.
Employers who pay in accordance with an enterprise agreement should ensure that the base rates of pay under the agreement is no lower than the increased relevant modern award rates of pay, particularly if the agreement was made several years ago.
To view the Commission’s decision click here.
Disclaimer: This does not purport to be comprehensive or to render legal advice. You should not act based on any information contained in this publication without first obtaining specific professional advice. Consult your legal advisor to determine if this applies to you.
