On 2 March 2023, the Australian Competition and Consumer Commission (ACCC) released its findings of its internet sweep of environmental claims as part of its ongoing campaign to protect Australian consumers from false or misleading advertising. A copy of the report, Greenwashing by businesses in Australia, is available here.
The internet sweep involved reviewing 247 company websites in October 2022, across a range of targeted sectors including energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing and footwear. The internet sweep followed an announcement by the ACCC in March 2022 that one of its compliance and enforcement priorities for 2022/23 was consumer and fair trading issues in relation to environmental claims and sustainability.
The ACCC’s announcement regarding the results of its online enforcement sweep was made only 3 days after the Australian Securities & Investments Commission (ASIC) launched its first-ever greenwashing case against Mercer Superannuation in relation to claims made regarding the environmental and sustainability credentials of its Sustainable Plus investment option. ASIC announced in late 2022 that it was targeting greenwashing and other misleading conduct in relation to sustainable finance as part of its enforcement priorities for 2023.
The ACCC found high numbers of ‘concerning’ environmental claims
The ACCC report revealed that 57% of the 247 businesses reviewed by the ACCC in late 2022 made concerning environmental claims and the key sectors, with the greatest proportion of concerning claims originating from the following industry sectors:
- Cosmetic and personal care
- Textiles, garments and shoes
- Food and beverages
Guidance for businesses making environmental claims
The findings of the report reinforce that when making environmental claims in marketing, businesses should:
- Avoid using vague terms such as ‘green’, ‘kind to the planet’, ‘eco-friendly’, ‘responsible’ or ‘sustainable’
- Provide sufficient information to substantiate environmental claims
- Avoid making absolute claims without certainty e.g. ‘100% plastic-free’, ‘100% recyclable’
- Consider the entire lifecycle of the product (for example, do the environmental claims relate only to the product’s manufacturing processes, use or disposal, or can the term be applied across the entire life of the product?)
- Be consistent with environmental and sustainability goals and make it clear what practical changes are being implemented to achieve the goals so they are not merely aspirational
Will the ACCC issue infringement notices?
The ACCC says it will now undertake further work to determine whether any of the individual environmental claims identified during the sweep breach the relevant provisions of the Australian Consumer Law. If the ACCC considers that a claim cannot be substantiated, it has the power to issue infringement notices or it could otherwise commence proceedings seeking declarations, injunctions pecuniary penalties, adverse publicity orders, corrective advertising orders, community service orders and/or disqualification orders from a court.
This article forms part of DCC’s Sustainability & IP initiative