The Australian Competition and Consumer Commission (ACCC) has recently published draft guidance aimed at improving the accuracy and integrity of environmental and sustainability claims made by businesses. The purpose of this guidance is to protect consumers from “greenwashing,” where businesses make potentially misleading claims about their environmental practices or the sustainability of their products. The ACCC’s greenwashing internet sweep, conducted prior to the publication of the draft guidance, found that 57 percent of the reviewed businesses were making potentially misleading environmental claims.
ACCC Chair Gina Cass-Gottlieb emphasized the importance of honesty and transparency in environmental claims, stating that false or misleading claims can erode consumer trust and undermine genuine efforts by businesses to adopt sustainable practices. The draft guidance sets out eight practical principles that the ACCC encourages businesses to follow when making environmental claims. By adhering to these principles, businesses can reduce the likelihood of misleading consumers and contravening the Australian Consumer Law.
According to Cass-Gottlieb, businesses should provide clear, accurate, and trustworthy information about their environmental or sustainability claims and be able to substantiate those claims with evidence. If a business is uncertain or unable to substantiate a claim, it is advised not to make the claim in the first place.
The ACCC is now seeking feedback on the draft guidance from businesses, consumers, and other stakeholders. The aim is to gauge whether the guidance enhances businesses’ confidence in making legitimate environmental claims and to gather input on how businesses can provide useful and relevant information about green claims to consumers. The consultation period for the draft guidance is open until September 15, 2023.
In the context of the ACCC’s overall priorities, environmental and sustainability claims have been highlighted as areas of focus for compliance and enforcement activities in the 2023-24 period. The ACCC aims to address consumer, product safety, fair-trading, and competition concerns related to these claims during this timeframe. Click here to access draft guidance for businesses released by ACCA.