ACCC sets off to investigate greenwashing as number of misleading claims increase

The ACCC has confirmed it will be investigating a number of businesses for potential greenwashing, following an internet sweep which found more than half of the reviewed companies made concerning claims about their environmental or sustainability practices.

The ACCC conducted this internet sweep to identify misleading environmental and sustainability marketing claims in October/November 2022 by reviewing 247 company websites across a range of targeted sectors, including energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing and footwear.

Of the reviewed businesses, 57 per cent were identified as having made concerning claims about their environmental credentials. The cosmetic, clothing and footwear and food and drink sectors were found to have the highest proportion of concerning claims among the industries targeted in the operation. Other sectors examined also had a significant proportion of concerning claims.

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

“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.

ACCC has several active investigations across the packaging, consumer goods, food manufacturing and medical devices sectors for alleged misleading environmental claims.

 “These may grow as we continue to conduct more targeted assessments into businesses and claims identified through the sweep,” Lowe added.

“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.”

The ACCC will also conduct various educational activities with businesses, including updating economy-wide guidance material and targeted guidance for specific sectors.

“We want to see businesses taking steps to ensure that environmental claims are accurate and 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,” Lowe said.

ACCC encourages businesses to come forward if they become aware they have made false or misleading marketing claims. Businesses which cooperate and advise of any issues with their operations will be considered more favourably than those that wait for the ACCC to unearth these problems.

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