The Australian Competition and Consumer Commission (ACCC) is cracking down on deceptive environmental claims made by businesses, commonly known as ‘greenwashing’. In May this year, we published an article, 50 shades of greenwashing: The ACCC reports on Australia’s environmental exaggerations, that detailed the ACCC’s internet sweep, which revealed potentially misleading information in 57% of businesses reviewed.
Since then, the ACCC has issued draft guidance that outlines eight practical principles to help businesses make accurate environmental claims. This information aims to improve the reliability of sustainability claims and safeguard consumers from misleading information.
Emphasising the need for clarity, accuracy, and trustworthiness, the guidance calls on businesses to substantiate their claims with verifiable evidence and not to make broad and ambiguous environmental claims. To gain the trust of environmentally-conscious consumers and comply with the Australian Consumer Law (ACL), the ACCC’s draft guidance asks businesses to follow these eight principles when making environmental claims:
- Make truthful claims without exaggeration.
- Provide evidence to support claims.
- Be transparent and include all relevant information.
- Explain any conditions or qualifications on claims.
- Avoid broad and unqualified claims.
- Use clear and understandable language.
- Ensure visual elements do not mislead.
- Be direct and open about sustainability transitions.
Following these principles will help businesses build trust, avoid ‘greenwashing,’ and make responsible environmental claims.
With consumers being increasingly environmentally conscious, businesses’ genuine adoption of sustainable practices may result in greater customer loyalty and higher returns. Conversely, engaging in greenwashing could lead to reputational damage, loss of consumer trust, and potential legal consequences.
The ACCC encourages feedback on the draft guidance and is consulting with stakeholders.
If the draft guidance impacts the promotion of your products or services, and you have any concerns about the draft guidance, we can assist you making submissions to the ACCC during the consultation period.
The draft guidance provides a clear signal of the ACCC’s intention to curb greenwashing practices and to take enforcement action where businesses step out of line of the guidance and the applicable ACL principles. Businesses should heed this signal and ensure that all environmental claims adhere to the eight principals prescribed by the ACCC.
Get in Touch
CIE Legal is the law firm for consumer products business. We have extensive experience advising on advertising compliance reviews, including reviewing advertising for greenwashing risks. If you would like us to review your advertising claims, or if you need assistance with advertising compliance, we’d love to hear from you. Please get in touch with Raph Goldenberg.