The Australian Competition and Consumer Commission (ACCC) recently conducted a “sweep” of Australian businesses’ websites for “greenwashing” and released a report on its findings.
Greenwashing refers to the practice of providing misleading or deceptive information regarding the environmental impact of a product, service, or company. The investigation comes as consumer awareness of environmental issues continues to rise, with more people making purchasing decisions based on a business’s environmental practices.
Greenwashing Prevalent in Australia
The ACCC report reveals that greenwashing is widespread across various industries in Australia; of the 247 businesses reviewed during the sweep, 57 per cent were found to have made concerning claims about their environmental sustainability practices. The food and drink, cosmetics, and clothing and footwear sectors were found to have the highest proportion of concerning claims among the industries targeted in the sweep.
Common Greenwashing Practices
The ACCC’s report identified several common greenwashing practices, including:
- Vague or ambiguous claims: Businesses making broad or imprecise environmental claims without providing specific evidence or context. Examples include using terms like ‘green’, ‘eco-friendly’, ‘responsible’ and ‘sustainable’ to describe their products without substantiation.
- Inadequate substantiating information: Many businesses made environmental and sustainability claims without providing sufficient or verifiable evidence.
- Absolute claims: Businesses made absolute claims such as being 100% plastic-free, recyclable, or carbon positive, which can be misleading if not supported by strong evidence. It also raised concerns about potentially false claims related to products made from 100% recycled materials, stressing the importance of businesses verifying the accuracy of such claims.
Consumer Impact
The report highlighted that greenwashing can undermine consumer trust and may hinder genuine efforts to improve environmental performance. Consumers who are misled by greenwashing may inadvertently support companies and products that do not align with their environmental values.
Legal Ramifications
Businesses that engage in greenwashing practices may be in breach of the Australian Consumer Law (ACL), which prohibits misleading or deceptive conduct and various false representations about goods and services. The ACCC has the authority to take enforcement action against businesses that breach the ACL, which may result in the imposition of heavy penalties.
Recommendations
Be Transparent and Accurate – Ensure that environmental claims are transparent and accurate. Businesses should ensure that their environmental claims are clear, specific, and supported by robust evidence.
Undertake Regular Reviews – Regularly review your environmental claims and marketing materials to ensure they remain accurate and relevant. This includes updating claims as new information becomes available and removing outdated information.
See the ACCC’s media release and full report.
Get in Touch
CIE Legal is the law firm for consumer products business. We have extensive experience advising on advertising compliance reviews. If you would like us to review your advertising for greenwashing claims, or if you need assistance with advertising compliance, we’d love to hear from you. Please get in touch with Raph Goldenberg.
