The Australian Competition and Consumer Commission (ACCC) has released new guidance on how businesses should communicate greenhouse gas emissions claims to consumers, warning that misleading environmental marketing risks breaching the Australian Consumer Law.
The guidance, titled Making emissions claims to consumers, published on October 20, sets out a clear enforcement standard. Businesses should use credible, science-based accounting methods, be transparent about their reliance on purchased carbon credits, and consider what average consumers would understand their claims to mean.
For brokers advising commercial clients, this is not just a compliance development. It is a liability question, and the financial consequences are getting larger.
ACCC deputy chair Mick Keogh said the guidance is designed to protect consumers while holding businesses to account for their environmental marketing. “Consumers should be able to trust the emissions-related claims that businesses make. Greenwashing not only limits the ability of consumers to make informed purchasing decisions, but it also disadvantages businesses that have invested in the development of products or services that are genuinely more environmentally sustainable,” Keogh said.
He urged businesses to act now. “We strongly encourage businesses to review their consumer facing emissions claims in light of our guidance. If any existing claims raise concerns, businesses should update their messaging, gather stronger evidence, or reconsider using it,” Keogh said.
The guidance calls on businesses to base emissions claims on complete and reputable accounting, avoid selective or vague claims, avoid “double counting” emissions changes, and only make forward-looking claims where they have reasonable grounds.
Carbon credits are acknowledged as a complement to direct emissions reductions. But if marketing gives the impression that credits and direct reductions are equivalent or cancel each other out, businesses must have a reasonable basis for that claim.
Read more: ACCC lands $67.7 million to pursue more consumer law breaches
Greenwashing has been an ACCC enforcement priority since 2023. The regulator has already secured an $8.25 million Federal Court penalty against Clorox Australia for misleading “ocean plastic” claims on certain GLAD products. It has also commenced Federal Court proceedings against Australian Gas Networks over its renewable gas campaign and against the maker of Banana Boat and Hawaiian Tropic sunscreens over “reef friendly” claims.
The financial stakes have grown. In March 2026, the maximum penalty per contravention of the Australian Consumer Law doubled from $50 million to $100 million for bodies corporate under the Treasury Laws Amendment (Doubling Penalties for ACCC Enforcement) Act 2026, according to law firm Gilbert + Tobin. The penalty can also reach three times the value of the benefit obtained, or 30% of the corporation’s adjusted turnover, whichever is greater.
The Australian Securities and Investments Commission (ASIC) is running a parallel enforcement track on sustainability-related financial products. Law firm Ashurst noted that ASIC secured a $10.5 million penalty against a superannuation fund for ESG-related misrepresentations and commenced its first proceeding against the responsible entity of a managed investment scheme over greenwashing in October 2025.
The dual regulatory pressure from the ACCC and ASIC creates overlapping exposures across D&O, professional indemnity, and management liability policies.
Allianz Commercial flagged this trend in a February 2025 report, noting that climate change litigation has now been recorded in 55 countries. Dan Holloway, the insurer’s head of global management liability, warned that greenwashing does not need to be deliberate to create legal risk. “This unintentional greenwashing is just as dangerous, exposing directors and officers to significant legal risks,” Holloway said.
Allianz also noted that many insurers now consider climate-related disclosures when assessing D&O coverage, examining board oversight, director education, and the use of third-party expert advice.
Kym Beazleigh, head of professional and financial risks in Australia for Markel Insurance, told Insurance Business that brokers should be stress-testing their clients’ ESG claims rather than accepting them at face value.
“It needs to be factual, it needs to be real, it needs to be stress tested,” Beazleigh said, recommending that brokers ask clients for concrete evidence of their sustainability initiatives from the past 12 months.
Reliable emissions data remains a challenge across the market. The Insurance Council of Australia’s (ICA) 2025 net-zero member survey found that 60% of participating insurers reported difficulty gathering consistent emissions data, with particularly low confidence in Scope 3 figures. If insurers themselves face data challenges, the risk that commercial clients are making claims based on incomplete accounting is a factor brokers should weigh.
Read more: How can brokers help clients manage greenwashing risks?
Australia’s mandatory climate-related financial disclosure regime, which commenced for the largest reporting entities in January 2025, adds another dimension. As more companies are required to report emissions data, any gap between mandatory disclosures and voluntary marketing claims becomes a potential trigger for regulatory action or litigation.
The ACCC noted it has observed some companies shift away from vague carbon neutral claims and distant future targets toward more transparent communication about their real-world environmental impacts. The regulator said it will continue to monitor this trend and consider targeted enforcement action where appropriate.
For brokers, the conversation at renewal is changing. Commercial clients making emissions claims now face a defined enforcement standard backed by penalties of up to $100 million per contravention, active regulators on two fronts, and growing insurer scrutiny of sustainability governance. Whether existing D&O and management liability policies adequately respond to greenwashing allegations and consumer law proceedings is a question worth raising now.
