The ACCC has published draft guidance to improve the integrity of environmental and sustainability claims made by businesses, identifying eight practical principles to apply.
The draft guidance aims to address the concerning conduct identified by the ACCC’s recent greenwashing internet sweep, which found 57 per cent of businesses reviewed were making potentially misleading environmental claims.
The food and beverage sector was found to be in the top three industries making questionable environmental claims.
ACCC chair Gina Cass-Gottlieb said that as consumers became more environmentally conscious, businesses needed to be honest and transparent when making environmental or sustainability claims so consumers are not being misled.
“False or misleading claims can undermine consumer trust in all green claims, particularly when consumers are often paying higher prices based on these claims.
“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.
“Our draft guidance sets out what the ACCC considers to be good practice when businesses make environmental claims about their products and services as well as making them aware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,” Cass-Gottlieb said.
The draft guidance identifies eight practical principles which the ACCC encourages businesses to apply when making environmental claims:
- Make accurate and truthful claims
- Have evidence to back up your claims
- Don’t leave out or hide important information
- Explain any conditions or qualifications on your claims
- Avoid broad and unqualified claims
- Use clear and easy-to-understand language
- Visual elements should not give the wrong impression
- Be direct and open about your sustainability transition
By following these principles, businesses are less likely to mislead consumers and contravene the Australian Consumer Law.
“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.
“If you make a claim about the environmental or sustainability benefits of your product or service – make sure it’s right, and if you are unsure or can’t substantiate these claims, then don’t make the claim,” Cass-Gottlieb said.
The ACCC is seeking feedback from businesses, consumers and other stakeholders on the draft guidance.
“We would like to hear from businesses on whether our draft guidance improves their confidence in making legitimate environmental and sustainability claims as well as if they have seen concerning green claims made by other businesses.
“We also want to hear from consumers on how businesses can provide useful and relevant information about any green claims so they can be confident in the accuracy of these claims,” Cass-Gottlieb said.
Consultation for the draft guidance is now open and closes on 15 September.
