ACCC targets greenwashing claims

The ACCC has published draft guidance with the goal of protecting consumers from ‘greenwashing’. The guidance aims to address the concerns identified in the ACCC’s greenwashing internet sweep report released in March, which found 57 percent of businesses reviewed were making potentially misleading environmental claims.

“As consumers become more environmentally conscious, businesses need to be honest and transparent when making environmental or sustainability claims so consumers are not being misled,” ACCC Chair Gina Cass-Gottlieb said. “False or misleading claims can undermine consumer trust in all green claims, particularly when consumers are often paying higher prices based on these claims.”

“Similarly, businesses that are taking genuine steps to adopt sustainable practices are put at a competitive disadvantage by businesses that engage in ‘greenwashing’ without incurring the same costs.”

In October last year, ACCC, sweepers reviewed 247 company websites across a range of eight targeted sectors including energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing and footwear industries. The aim of the sweep was to identify industries or sectors which commonly use environmental and sustainability claims, and to assess whether these claims have the potential to mislead consumers.

As a result of the study, the ACCC released the draft guidance identifying eight principles as guidance for retailers to comply with Australian Consumer Law obligations, and to ensure that any claims made create trust in their business and allow consumers to make informed decisions.

The principles are:

• Make accurate and truthful claims
• Have evidence to back up your claims
• Don’t leave out or hide important information
• Explain any conditions or qualifications on your claims
• Avoid broad and unqualified claims
• Use clear and easy-to-understand language
• Visual elements should not give the wrong impression
• Be direct and open about your sustainability transition

“Our draft guidance sets out what the ACCC considers to be good practice when businesses make environmental claims about their products and services as well as making them aware of their obligations under the Australian Consumer Law,” Ms Cass-Gottlieb said.

“Businesses must provide clear, accurate and trustworthy information to consumers about any environmental or sustainability claims and be able to provide evidence to back them up,” Ms Cass-Gottlieb said.

“If you make a claim about the environmental or sustainability benefits of your product or service – make sure it’s right, and if you are unsure or can’t substantiate these claims, then don’t make the claim.”

Sustainable Choice Group Founder and CEO Kiarne Treacy says she is not at all surprised that the consumer watchdog has issued the advice to businesses.

“We’ve been waiting for this move for a while now,” she said. “Environmental sustainability is an increasingly important issue to Australians and people want to see real action being taken.

“Businesses can no longer just say they are working to be environmentally conscious – they need to show it.

“With so many businesses found to be ‘greenwashing’ and misleading consumers with their claims, it’s more important than ever that those who are selling sustainability as a benefit are clearly outlining the steps they are taking.”

The ACCC is seeking feedback from businesses, consumers and other stakeholders on the draft guidance. Consultation closes on 15 September 2023 and can be submitted here: https://consultation.accc.gov.au/accc/environmental-and-sustainability-guidance

“We would like to hear from businesses on whether our draft guidance improves their confidence in making legitimate environmental and sustainability claims as well as if they have seen concerning green claims made by other businesses,” Ms Cass-Gottlieb said.

“We also want to hear from consumers on how businesses can provide useful and relevant information about any green claims so they can be confident in the accuracy of these claims.”

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