ACCC’s crackdown on greenwashing

Australia’s consumer watchdog has put businesses on notice about false environmental and sustainability claims, after finding a large number were engaging in ‘greenwashing’.

The Australian Competition & Consumer Commission (the ACCC) has published draft guidance to help businesses stay on the right side of the Australian Consumer Law. This comes in response to ACCC research in late 2022 that found 57% of businesses reviewed were making potentially misleading environmental claims.

The ACCC’s draft guidance has recommended that businesses apply eight principles when making environmental claims:

1. Make accurate and truthful claims.
2. Have evidence to back up your claims.
3. Don’t leave out or hide important information.
4. Explain any conditions or qualifications on your claims.
5. Avoid broad and unqualified claims.
6. Use clear and easy-to-understand language.
7. Make sure visual elements don’t give the wrong impression.
8. Be direct and open about your sustainability transition.

If you’re unsure, don’t say it: ACCC

ACCC chair Gina Cass-Gottlieb said businesses needed to be honest and transparent when making environmental or sustainability claims so consumers didn’t get misled.

“False or misleading claims can undermine consumer trust in all green claims, particularly when consumers are often paying higher prices based on these claims,” she said.

“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.”

Ms Cass-Gottlieb said businesses must provide clear, accurate information to consumers about green claims – and that “if you are unsure or can’t substantiate these claims, then don’t make the claim.”

The ACCC is seeking feedback from businesses, consumers and other stakeholders on its draft guidance. Consultation closes on 15 September 2023.