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The target on the back of businesses has increased with new “greenwashing” guidance unleashed by the Australian Competition and Consumer Commission (ACCC) to improve business sustainability and environmental claims.
The draft guidance was released today from the ACCC, which shed light on the consumer’s astonishing internet sweep, which began in October 2022 and was released in March.
The internet sweep discovered that 57 per cent of the companies reviewed did in fact enforce misleading environmental claims.
The ACCC Chair Gina Cass-Gottlieb said consumers were beginning to read between the lines and that businesses needed to become more honest and transparent when making environmental or sustainability claims.
“False or misleading claims can undermine consumer trust in all green claims, particularly when consumers are often paying higher prices based on these claims,” she said.
“Similarly, businesses that are taking genuine steps to adopt sustainable practices are put at a competitive disadvantage by businesses that engage in greenwashing without incurring the same costs.
The draft guidance identifies eight practical principles encouraging businesses to apply when making environmental claims, with faith these will be less likely to mislead consumers and contravene the Australian Consumer Law.
Some of these principles stipulate that businesses need to make sure they have the evidence to back up their claims, refrain from hiding or not disclosing important information, and avoid broad and unqualified claims.
“Our draft guidance sets out what the ACCC considers to be good practice when businesses make environmental claims about their products and services as well as making them aware of their obligations under the Australian Consumer Law,” Miss Cass-Gottlieb said.
“Businesses must provide clear, accurate and trustworthy information to consumers about any environmental or sustainability claims and be able to provide evidence to back them up.”
The regulator has called on consumers, businesses, and other stakeholders to provide feedback on the draft guidance consultation, which closes on September 15 2023.
The draft guidance follows a press release on July 10 from the Australian Securities and Investments Commission, which stated that greenwashing was eroding investor confidence in the market for sustainability-related financial products and corporate strategies.
