THE Australian Competition and Consumer Commission says it will be investigating a number of businesses for potential ‘greenwashing’, following an internet sweep which found more than half of the businesses it reviewed made concerning claims about their environmental or sustainability practices.
Of the 247 businesses reviewed during the sweep, 57 per cent were identified as having made concerning claims about their environmental credentials.
The cosmetic, clothing and footwear and food and drink sectors were found to have the highest proportion of concerning claims among the industries targeted in the operation. Other sectors examined also had a significant proportion of concerning claims.
“Our sweep indicates a significant proportion of businesses are making vague or unclear environmental claims. This warrants further scrutiny,” ACCC Deputy Chair Catriona Lowe said.
“Consumers are now, more than ever, making purchasing decisions on environmental grounds. Unfortunately, it appears that rather than making legitimate changes to their practices and procedures, some businesses are relying on false or misleading claims. This conduct harms not only consumers, but also those businesses taking genuine steps to implement more sustainable practices.”
“Businesses using broad claims like ‘environmentally friendly’, ‘green’, or ‘sustainable’ are obliged to back up these claims 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,” Ms Lowe said.
“Already, we have several active investigations underway across the packaging, consumer goods, food manufacturing and medical devices sectors for alleged misleading environmental claims and these may grow, as we continue to conduct more targeted assessments into businesses and claims identified through the sweep. We will take enforcement action where it is appropriate to do so as it is critical that consumer trust in green claims is not undermined.”
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The ACCC will also conduct a range of education activities with businesses, including updating economy-wide guidance material, in addition to targeted guidance for specific sectors.
“The sweep has helped inform our forthcoming guidance about what steps businesses need to take to improve the integrity of their environmental claims,” Ms Lowe said.
“We want to see businesses taking steps to ensure that environmental claims are accurate as well as meaningful for consumers. Our sweep has shown that claims are most useful where they are relevant, clear, reliable and transparent.”
“We will engage directly with businesses and industry associations to improve compliance with the Australian Consumer Law.”
“Importantly, we encourage businesses to come forward if they become aware they have made false or misleading marketing claims. Businesses who cooperate and advise of any issues with their operations, will be considered more favourably than those who wait for the ACCC to unearth these problems,” Lowe said.
The ACCC encourages consumers and businesses to contact the ACCC to report any potentially misleading environmental or sustainability claims. Report through the ACCC website or by contacting the ACCC Infocentre on 1300 302 502.
In October/November last year, sweepers reviewed 247 company websites across a range of targeted sectors including energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing and footwear.
Each year, the ACCC announces a list of Compliance and Enforcement priorities. These priorities outline the areas of focus for the ACCC’s compliance and enforcement activities for the following year.
As part of the 2022-23 Compliance and Enforcement Priorities, the ACCC is prioritising consumer and fair-trading issues in relation to environmental and sustainability claims.
Under the Competition and Consumer Act (CCA), the ACCC can use powers under s155 of the Act to obtain information, documents and evidence in relation to matters which may constitute a contravention of the CCA. The ACCC can also issue substantiation notices requiring a person or business to give information and/or produce documents that could be capable of substantiating or supporting a claim or representation made by the person or business.
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