As local and global timeframes for reaching sustainability targets edge closer and consumer behaviour adapts, the Australian Competition and Consumer Commission warns businesses ‘greenwashing’ their credentials are in its sights.
ACCC deputy chair Delia Rickard said businesses need to be ready to substantiate any environmental and sustainability claims they make when marketing the products or services.
“The ACCC is actively monitoring green claims in the market and will be considering what steps can be taken to improve their integrity.
“In looking at claims we are concerned about what the ordinary consumer will understand the claim to mean,” Rickard said.
She said the commission was increasingly aware of businesses promoting false green claims to capitalise on changing consumer expectations.
“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.”
The ACCC wants to minimise the risk of undermining consumer trust and confidence in the market.
“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. The ACCC won’t hesitate to take enforcement action where we see that consumers are being misled or deceived by green claims,” Rickard said.
As well as protecting consumers, Rickard pointed out those companies investing in certification needed to be protected.
“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.
She acknowledged the transition to more sustainable practices took time and involved the entire supply chain. While companies might want to promote steps along the way, they had to be careful not to overstate their progress.
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,” she said.
