Greenwashing found to be rampant in Australia

by Ned Lupson
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The Australian Competition and Consumer Commission (ACCC) is calling on businesses to substantiate claims of sustainable practice, after finding that 57 percent of the businesses it reviewed were making misleading statements. 

Businesses get creative to appear climate-conscious, from exaggerating climate action to inventing internal certification programs, in an act known as ‘greenwashing’.

“As consumers become more environmentally conscious, businesses need to be honest and transparent when making environmental or sustainability claims so consumers are not being misled,” says ACCC chair Gina Cass-Gottlieb.

The ACCC’s internet sweep of environmental claims included businesses servicing energy, vehicles, electronics and home appliances, household and cleaning products and more. The sectors with the greatest proportion of concerning environmental claims were takeaway packaging, cosmetics and personal care, and food and beverages, respectively.

“False or misleading claims can undermine consumer trust in all green claims, particularly when consumers are often paying higher prices based on these claims,” says Cass-Gottlieb.

“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.”

New guidelines for businesses

The ‘Environmental and sustainability claims’ report is a recommendation for businesses to authentically engage with sustainability action through eight new principles, which cover setting goals, not exaggerating and providing evidence.

“Our draft guidance sets out what the ACCC considers to be good practice when businesses make environmental claims about their products and services as well as making them aware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,” says Cass-Gottlieb.

Businesses and consumers can give feedback on the draft guidance, as consultation is now open and closes on 15 September 2023.

“We would like to hear from businesses on whether our draft guidance improves their confidence in making legitimate environmental and sustainability claims as well as if they have seen concerning green claims made by other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.”

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