The Australian Competition & Consumer Commission (ACCC), Australia's competition regulator and national consumer law champion, will investigate businesses for potential greenwashing.
ACCC Deputy Chair Catriona Lowe said businesses using broad terms – such as “environmentally friendly,” “green,” or “sustainable” – are required to back up their claims through reliable scientific reports, transparent supply chain information, reputable third-party certification, or other forms of evidence.
The ACCC's decision to probe some businesses accused of greenwashing follows an internet sweep that found that over half of the businesses reviewed made concerning claims about their environmental or sustainability practices.
Of the 247 businesses reviewed during the sweep, 57% made concerning claims about their environmental credentials – with the cosmetic, clothing and footwear, and food and drink sectors found to have the highest proportion of concerning claims among the industries targeted in the operations. Other sectors examined also had a significant proportion of concerning claims.
“Our sweep indicates a significant proportion of businesses are making vague or unclear environmental claims. This warrants further scrutiny,” Lowe said. “Consumers are now, more than ever, making purchasing decisions on environmental grounds. Unfortunately, it appears that rather than making legitimate changes to their practices and procedures, some businesses are relying on false or misleading claims. This conduct harms not only consumers, but also those businesses taking genuine steps to implement more sustainable practices.”
Aside from investigating some businesses, the ACCC will conduct educational activities with businesses, including updating economy-wide guidance material, in addition to targeted guidance for specific sectors.
“The sweep has helped inform our forthcoming guidance about what steps businesses need to take to improve the integrity of their environmental claims,” Lowe said. “We want to see businesses taking steps to ensure that environmental claims are accurate as well as meaningful for consumers.
“Our sweep has shown that claims are most useful where they are relevant, clear, reliable, and transparent.”
The ACCC will engage directly with businesses and industry associations to improve compliance with the Australian Consumer Law.
“We encourage businesses to come forward if they become aware they have made false or misleading marketing claims,” said Lowe.
“Businesses who cooperate and advise of any issues with their operations will be considered more favourably than those who wait for the ACCC to unearth these problems.”
