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Australia’s consumer watchdog is set to crack down on greenwashing in advertising

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By Danielle Long | Acting APAC Editor

September 21, 2022 | 4 min read

Australia’s consumer watchdog is set to crack down on greenwashing in advertising and marketing as it seeks to better regulate the environmental claims made by businesses.

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Australian consumer watchdog to crackdown on greenwashing

The Australian Competition and Consumer Committee (ACCC) will commence an “internet sweep” to examine the environmental claims made by Australian businesses.

It aims to use its findings to provide guidance to businesses and has not ruled out policy reform and greater regulation around the use of specific environmental claims.

The ACCC has said it will engage with the industry and work closely with other regulators, including ASIC and the Clean Energy Regulator, to ensure a coordinated approach.

The concern is “what the ordinary consumer will understand a claim to mean,” said ACCC deputy chair Delia Rickard.

“Consumer and fair-trading issues relating to environmental claims and sustainability are a current priority for the ACCC. As consumers and businesses become more focused on sustainability to inform their purchasing decisions, businesses are increasingly advertising their ‘sustainability benefits’ to sell their goods and services.

“Advertising is a powerful tool in influencing consumers’ perceptions and purchasing decisions. This is particularly the case when it comes to green claims. Greenwashing is ultimately a form of advertising. And perhaps more so than many other types of claims, green claims involve a huge element of trust as you usually can’t tell just by looking, or even using, whether or not claims are true.

“To increase consumer confidence in environmental claims and to protect those businesses that legitimately make environmental claims, it might be necessary to consider introducing clearer standards and regulations. This is something that the ACCC will continue to consider in consultation with relevant stakeholders.

“The ACCC won’t hesitate to take enforcement action where we see that consumers are being misled or deceived by green claims," said Rickard.

The move follows similar action in the Netherlands, which has led to H&M and Decathlon having to remove any misleading sustainability claims from their company materials.

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