Australian Regulator Publishes Draft Guidance to Improve Businesses’ Environmental Claims

The Australian Competition and Consumer Commission (ACCC), has published draft guidance to improve the integrity of environmental and sustainability claims made by businesses and protect consumers from ‘greenwashing’.

The draft guidance aims to address the concerning conduct identified by the ACCC’s recent greenwashing internet sweep, which found 57% of businesses reviewed were making potentially misleading environmental claims.

“As consumers become more environmentally conscious, businesses need to be honest and transparent when making environmental or sustainability claims so consumers are not being misled,” ACCC Chair Gina Cass-Gottlieb said.

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

“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.”

“Our draft guidance sets out what the ACCC considers to be good practice when businesses make environmental claims about their products and services as well as making them aware of their obligations under the Australian Consumer Law,” Cass-Gottlieb added.

The draft guidance identifies eight practical principles which the ACCC encourages businesses to apply when making environmental claims. By following these principles, businesses are less likely to mislead consumers and contravene the Australian Consumer Law.

“Businesses must provide clear, accurate and trustworthy information to consumers about any environmental or sustainability claims and be able to provide evidence to back them up,” Cass-Gottlieb said.

“If you make a claim about the environmental or sustainability benefits of your product or service – make sure it’s right, and 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The ACCC is seeking feedback from businesses, consumers, and other stakeholders on the draft guidance.