ACCC draft guidance aims to end greenwashing and empower consumers

With growing awareness and concern about environmental issues, consumers are increasingly seeking out eco-friendly and sustainable products and services. However, this rise in demand has also given rise to a phenomenon known as "greenwashing," where businesses exaggerate or mislead consumers about their environmental efforts. To protect consumers from deceptive practices and ensure businesses adhere to responsible environmental claims, the Australian Competition and Consumer Commission (ACCC) has recently published draft guidance. This blog post delves into the ACCC's efforts to improve businesses' environmental claims and promote transparency, trust and responsible consumption.

Understanding greenwashing and its impact

Greenwashing is a deceptive marketing strategy used by businesses to give the impression that their products or services are environmentally friendly when, in reality, they might not be. This misleading practice can lead consumers to make purchasing decisions based on false information, resulting in a negative impact on the environment. Moreover, genuine businesses that are investing in sustainable practices may face unfair competition from those making false environmental claims without undertaking similar efforts.

ACCC's greenwashing internet sweep

To address the growing concern of greenwashing, the ACCC conducted a greenwashing internet sweep in late 2022, analysing environmental claims made by businesses. The results were concerning, with 57 percent of the reviewed businesses found to be making potentially misleading environmental claims. This highlighted the urgency of implementing measures to protect consumers and create a level playing field for businesses committed to sustainability.

ACCC's draft guidance: Eight principles for trustworthy environmental and sustainability claims

In response to the findings of the greenwashing internet sweep, the ACCC has released a draft guidance document. The main objective of this guidance is to promote integrity in environmental and sustainability claims made by businesses and prevent the spread of misleading information. The draft guidance outlines eight practical principles for businesses to follow when making environmental claims:

1. Make accurate and truthful claims: Businesses should ensure that all claims they make about their products or services are true and accurate. Even if claims are factually correct, they should avoid exaggerating benefits, or the scientific acceptance of a claim.
   
   
2. Have evidence to back up claims: To maintain credibility businesses should possess clear evidence to support their environmental claims. Scientific and independent evidence is most reliable. Providing accessible research and data helps consumers trust the claims.
   
   
3. Don't hide important information: Transparency is crucial in environmental claims. Businesses must provide all relevant information, allowing consumers to make informed decisions.
   
   
4. Explain conditions or qualifications: If claims are only valid under specific circumstances, businesses should clearly explain these conditions to consumers.
   
   
5. Avoid broad and unqualified claims: Claims should be specific and substantiated, avoiding broad statements that can be open to misinterpretation.
   
   
6. Use clear and understandable language: To reach a broader audience, businesses should avoid technical jargon or acronyms, and instead use straightforward, accessible language.
   
   
7. Be careful with visual elements: Visual elements, such as packaging and logos, can significantly influence consumers' perception of environmental impact. Businesses should ensure visual elements align with the claims they make.
   
   
8. Be open about sustainability transition: When making aspirational claims about future environmental objectives, businesses should have clear and actionable plans for achieving these goals. If transitioning to more sustainable operations, businesses should be direct and transparent about their progress.

Impact on consumers and businesses

The ACCC's draft guidance aims to empower consumers by providing them with accurate and trustworthy information to make eco-conscious choices. Consumers can now scrutinise businesses' environmental claims more effectively and support genuinely sustainable practices. Moreover, businesses adhering to the guidance will enhance their reputation and gain a competitive advantage over those engaging in greenwashing.

The ACCC's draft guidance on environmental claims represents a significant step towards combating greenwashing and promoting responsible consumption in Australia. By adhering to the eight principles outlined in the guidance, businesses can build consumer trust, foster sustainability and create a greener future. As the consultation for the draft guidance continues, it is essential for businesses, consumers, and stakeholders to provide feedback and actively contribute to the integrity of environmental claims in the market.

Take action now! If you want to learn more about greenwashing, its impact on consumers and best practices to identify genuine environmental claims, visit the ACCC website. There, you'll find insightful examples of greenwashing and valuable resources to help you make informed decisions as a responsible consumer or business owner.

Let's work together to create a sustainable, transparent and trustworthy environment for all.

Follow SmartestEnergy Australia’s new LinkedIn page for Australian-specific clean energy insights delivered straight to your newsfeed.