In late 2022, Australia’s chief consumer law regulator, the Australian Competition and Consumer Commission (ACCC), conducted an internet sweep of environmental and sustainable marketing claims in an effort to crack down on ‘greenwashing’. At the beginning of March 2023, it released its preliminary findings and announced that more than half (57%) of the 247 businesses it looked at across 8 different sectors were found to be making ‘concerning’ claims about their environmental credentials. Sectors with the greatest proportion of concerning environmental claims included cosmetic and personal care, textiles, garments and shoes, and food and beverages.
Key issues identified in the sweep include vague and unqualified claims (i.e., ‘green’, ‘eco-friendly’, ‘sustainable’), a lack of substantiating information, use of absolute claims (i.e., ‘100% plastic free’, ‘100% recyclable’, ‘zero emissions’), use of comparisons, exaggerating benefits or omitting relevant information, use of third-party certifications and the use of aspirational claims with little information on how these goals will be achieved.
So, where to from here? The ACCC has said that it will be conducting further analysis of the results and will take enforcement and compliance action where appropriate. It also proposes to engage in educational activities with a view to producing updated guidance for businesses. Interestingly, the ACCC report has also prompted a landmark Senate Inquiry into greenwashing which was announced shortly after the ACCC released its results. The inquiry is underway and will investigate the impacts of greenwashing on both consumers and the environment, and further develop the legal and regulatory compliance framework around it. The Senate is calling for submissions from interested stakeholders by 8 June 2023 and the inquiry is due to report back to Australian Parliament by 5 December 2023.
Businesses should be on notice that regulators and the government are tightening the screws on greenwashing. Now is the time for businesses to be proactive and take a closer look at how they’re promoting and marketing their green credentials, as well as their holistic ESG strategy.