Firstly, LexisNexis Australia executive director of practical guidance Katherine Llewellyn detailed, professionals need to proactively consider that consumers are increasingly willing to pay more for products that are less harmful to the environment and are also expecting more from companies in terms of environmental, social and governance (ESG).

“Many businesses have tried to capitalise on this by rebranding as environmentally friendly. If that claim can’t be substantiated, it’s known as ‘greenwashing’,” she noted.

“Australian regulators are increasingly scrutinising ESG conduct by companies. ASIC is cracking down on greenwashing and, on 28 February, begun proceedings in the Federal Court against Mercer Superannuation for alleged greenwashing by making misleading statements about the sustainability of some of its superannuation investment options.”

This will be the first of many cases, the Australian Securities and Investments Commission (ASIC) recently warned.

Further, Ms Llewellyn added, the Australian Competition and Consumer Commission (ACCC) recently did a sweep of businesses’ conduct online and found that more than half were engaged in greenwashing.

“It’s widely expected that the ACCC will really start pursuing companies for ‘greenwashing’ in earnest in 2023. The ACCC has already flagged that it has several investigations on foot, and court action is likely to follow,” she said, in line with ASIC’s intentions.

The competition regulator’s movements

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Moreover, Ms Llewellyn continued, the ACCC enforcement priorities for the next year are becoming apparent, marking the first time that new chair Gina Cass-Gottlieb has detailed such priorities since taking over from Rod Sims.

In addition to greenwashing, she said, it is likely that digital platforms and markets will be a key focus area for the next 12 months.

“The government is yet to respond to ACCC’s proposed digital platform reforms announced last year as part of its fifth report in the digital platform services inquiry. Mergers in digital markets also raise interesting issues about the appropriate realm of competition law,” she said.

ESG

Environmental, social and governance issues continue to make their way up the board agenda, Ms Llewellyn stressed, including in industries outside the immediate climate change space.

“For a long time, ‘E’ took prominence, but now we’re seeing the rise of the ‘S’ (e.g., modern slavery, workplace health and safety, I&D, cyber security, gambling, alcohol) and ‘G’ (AML/CTF, board diversity and ethics, exec pay),” she said.

“On the ‘E’ aspect of ESG, it’s worth calling out one of the biggest developments which is on the reporting of climate-related risks. In short, mandatory climate reporting is imminent in Australia.”

Cyber security

Unfortunately, Ms Llewellyn went on, there will be more and more cyber attacks between now and year’s end due to the “volatile political climate”.

“We would expect to see cyber resilience at the forefront of business agenda in 2023,” she said.

“The key development is the 2023–2030 Australian Cyber Security Discussion Paper released on 27 February by the Minister for Home Affairs, Expert Advisory Board. The main proposed reform is to the Security of Critical Infrastructure Act — including customer data and systems in the definition of critical assets,” she outlined.

“This is to expand the government’s power to extend over major data breaches (e.g., Optus and Medibank attacks) and not just be limited to operational disruptions.”

Artificial intelligence

Finally, Ms Llewellyn said, generative AI — such as ChatGPT — will continue to be a headline focus for the remainder of the year.

“Organisations are navigating how to work with the technology — so we are going to see more generative AI hit the market, which seeks to address some of the limitations that currently available generative AI has,” she said.

“We are also likely to see the impact of generative AI on cyber crime (criminals and state actors etc., integrating the technology into their existing systems to make them more sophisticated, the attacks more believable, more efficient).”