ACCC draft guidance sets eight principles against greenwashing claims

Australia's competition regulator ACCC published draft greenwashing guidance after finding 57 percent of reviewed businesses made potentially misleading environmental claims. Its eight substantiation principles preview the kind of evidence-backed disclosure scrutiny that Indian companies making green marketing claims may face as regulators tighten oversight.

The Australian Competition and Consumer Commission published draft guidance to improve the accuracy of environmental and sustainability claims and protect consumers from greenwashing. An ACCC internet sweep found 57 percent of reviewed businesses made potentially misleading environmental claims. The draft sets out eight practical principles for businesses making green claims, requiring clear, accurate and substantiated information under the Australian Consumer Law. Chair Gina Cass-Gottlieb stated that if a business cannot substantiate a claim with evidence, it should not make the claim at all.

The guidance affects any business marketing products or services on environmental or sustainability grounds, spanning consumer goods, retail, manufacturing and services that advertise green credentials. Firms unable to evidence claims face exposure under the Australian Consumer Law, while consumers and stakeholders gain a clearer basis to challenge unsupported assertions. The ACCC flagged environmental and sustainability claims as enforcement and compliance priorities for the 2023-24 period, signalling heightened risk for companies relying on vague or undocumented green messaging.

Businesses should review marketing against the eight principles, build substantiation evidence for every environmental claim, and withdraw any claim they cannot support. The ACCC sought feedback from businesses, consumers and stakeholders, with the consultation period open until September 15, 2023. Indian companies advertising sustainability credentials should monitor this trend toward evidence-based green-claim enforcement, prepare documentation supporting their assertions, and watch for comparable regulatory guidance emerging domestically as greenwashing scrutiny intensifies across major markets.

Key figure — Consultation deadline: September 15, 2023