Are corporations all talk when it comes to ethics, and how did this assumption affect the public’s view on their decision-making and practice?

by Yu Thai Ha Nguyen

 

In Australia, there is currently no mandatory sustainability reporting standard, enabling high-emitting corporations to breach corporate ethics. Therefore, they tend to engage in greenwashing by making false or misleading claims in sustainability reports. This makes them miss target 12.6 of SDG 12 and creates information asymmetries, which can only be reduced by reasonable assurance. However, there has yet to be a standardized framework for sustainability assurance engagements, and 83% of them are limited assurance, so they cannot help businesses mitigate asymmetries or enhance their credibility. Additionally, greenwashing integrates ethical discourse with unethical praxis, creating the impression that companies are neither ethical nor unethical.

Contrarily, low-carbon firms tend to engage in greenhushing by concealing their progress towards target 13.2.2 of SDG 13, restricting stakeholders’ access to sustainability reports. Thus, media agencies serve as intermediaries between stakeholders and organizations, allowing them to evaluate whether organizations comply with ethical requirements. Nevertheless, how information is presented on the media alters public perception of corporations. By omitting material information and conducting subjective assessments of companies’ decision-making, media agencies instill the sense that companies are unethical into stakeholders. Nonetheless, the media also helps businesses partly rebuild public trust and shift stakeholders’ perspectives on their ethical practices from negative to neutral by promoting their restorative actions.

Moreover, companies can talk the talk, but cannot walk the walk. Take Commonwealth Bank and Westpac as examples. Although its website stated that its employees received generous salary packages, Commonwealth Bank deliberately underpaid them for 6 years. Likewise, Westpac pursued an AML/CTF policy, but it seriously violated the AML/CTF Act and incurred the heaviest civil penalty in Australian history. Despite these facts, they are still ranked among Australia’s Top100 Graduate Employers in 2024. In conclusion, disparities between corporations’ incentives and policies make stakeholders adopt an unbiased viewpoint on their ethical conduct.