Australia’s competition watchdog cracks down on greenwashing with investigation

ACCC deputy chair Catriona Lowe said, "Our sweep indicates a significant proportion of businesses are making vague or unclear environmental claims. This warrants further scrutiny.

"We have several active investigations underway across the packaging, consumer goods, food manufacturing and medical devices sectors for alleged misleading environmental claims and these may grow, as we continue to conduct more targeted assessments into businesses and claims identified through the sweep. We will take enforcement action where it is appropriate to do so as it is critical that consumer trust in green claims is not undermined," said Lowe.

The move follows similar activity in the UK where the Competitions and Marketing Authority (CMA) launched a review into the accuracy of green claims made by FMCG brands. Meanwhile, The Guardian this week revealed a draft EU crackdown on greenwashing would give companies "10 days to justify green claims about their products or face “effective, proportionate and dissuasive” penalties".

The ACCC sweep identified the worst offenders were from the cosmetic, clothing and footwear and food and drink sectors, however, other sectors also had a significant proportion of concerning claims.

"Consumers are now, more than ever, making purchasing decisions on environmental grounds. Unfortunately, it appears that rather than making legitimate changes to their practices and procedures, some businesses are relying on false or misleading claims. This conduct harms not only consumers, but also those businesses taking genuine steps to implement more sustainable practices."

"Businesses using broad claims like ‘environmentally friendly’, ‘green’, or ‘sustainable’ are obliged to back up these claims through reliable scientific reports, transparent supply chain information, reputable third-party certification or other forms of evidence."

"Where we have concerns, we will be asking businesses to substantiate their claims," Lowe said.

The ACCC has said it will crack down on vague and misleading claims by brands and will also conduct a range of educational activities with businesses, including updating economy-wide guidance material, in addition to targeted guidance for specific sectors.

"The sweep has helped inform our forthcoming guidance about what steps businesses need to take to improve the integrity of their environmental claims," said Lowe.

"We want to see businesses taking steps to ensure that environmental claims are accurate as well as meaningful for consumers. Our sweep has shown that claims are most useful where they are relevant, clear, reliable and transparent."

"We will engage directly with businesses and industry associations to improve compliance with the Australian Consumer Law."

The ACCC has also issued a call to businesses who have made false or misleading marketing claims to come forward.

"Businesses who cooperate and advise of any issues with their operations, will be considered more favourably than those who wait for the ACCC to unearth these problems," said Lowe.