ACCC will “not hesitate” to take enforcement action on greenwashing 

Tuesday, 20th September 2022 at 4:27 pm

The competition watchdog is warning businesses not to claim their products and services are environmentally friendly unless they can prove it.

The Australian Competition and Consumer Commission (ACCC) won’t hesitate to take enforcement action to prevent consumers being misled or deceived by green claims, says deputy chair Delia Rickard.

Speaking at a speech in Sydney, Rickard said the ACCC is hearing “growing concerns” about the practice of “greenwashing”, where businesses make unfounded claims or suggestions that their products or services are environmentally friendly.

“It is important that businesses can back up the claims they are making, whether through reliable scientific reports, transparent supply chain information, reputable third-party certification, or other forms of evidence,” she said.

“Where we have concerns, we will be asking businesses to substantiate their claims.

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

She added the ACCC is actively targeting greenwashing in 2022, warning businesses who are undermining consumer trust and confidence by greenwashing their goods and services.

“Broad terms like ‘environmentally friendly’, ‘green’, or ‘sustainable’ have limited value and may mislead consumers, as they rarely provide enough information about what that exactly means in terms of the product or service consumers are considering purchasing,” she said.

She added that the ACCC recognises the extra cost incurred by businesses who are investing in sustainable practices such as sustainable packaging, and noted the cost of production would differ markedly creating an unfair market advantage for the sustainable business.

“The absence of relevant government regulations may also make it difficult to implement certain environmental improvements,” she said.

The ACCC will soon be starting an internet sweep of various environmental claims made by Australian businesses and will release more information in the coming days and weeks, Rickards said.

She added a similar review undertaken by the International Consumer Protection Enforcement Network (ICPEN) in 2020 found that 40 per cent of environmental claims were potentially misleading and required further investigation.

The ACCC will use this data to inform the investigation.