ACCC to target businesses’ greenwashing claims

Hand uses green marker to colour in smoke pouring from chimney (environmental claims)
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Consumer watchdog the ACCC will crack down on ‘greenwashing’, saying businesses needed to be ready to substantiate any environmental or sustainability claims when marketing their goods and services.

In a speech to the Sydney Morning Herald Sustainability Summit yesterday, ACCC deputy chair Delia Rickard said the commission is actively targeting ‘greenwashing’ this year, warning businesses who make false or misleading claims undermine consumer trust and confidence in the market.

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“Unfortunately, the ACCC is hearing growing concerns that some businesses are falsely promoting environmental or green credentials to capitalise on changing consumer preferences,” Rickard said.

“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.

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

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

Ms Rickard said making sustainability work for business and consumers requires a multi-pronged approach.

“Through the consumer law, the ACCC plays a part in this by ensuring that businesses tell the truth, but there will also be roles for standards bodies, certification schemes, industry and governments via policy reform.

“The ACCC is actively monitoring green claims in the market and will be considering what steps can be taken to improve their integrity. This will include engaging with industry and producing guidance for businesses.

“In looking at claims we are concerned about what the ordinary consumer will understand the claim to mean.”

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Rickard said improving the veracity of environmental claims protects consumers and ensures competitive conduct in the market.

“Many businesses go to extraordinary lengths to make their processes, products and services more sustainable. This innovation and investment should be protected from unscrupulous behaviour of other businesses making green claims without incurring the same costs. This can have a chilling effect on investment in this space, as businesses are not able to realise the full benefits of making environmental improvements,” Rickard said.

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