Competition regulator the ACCC has stepped up its greenwashing crackdown.
The Australian Competition and Consumer Commission has revealed more detail on its review of 247 businesses which found more than half (57%) made potentially misleading environmental or sustainability claims.
“Our sweep found that the cosmetic, clothing and footwear, and food and drink sectors had the highest proportion of concerning claims,” says Catriona Lowe, deputy chair of the ACCC.
The peak body for advertisers, the AANA (Australian Association of National Advertisers), is conducting a review of its environmental claims code to ensure community concerns are reflected in advertising.
The review aims to ensure advertisers apply rigorous standards when making environmental claims and to increase consumer trust in the stated claims of environmental benefits appearing in advertising.
As consumers demand more ethical and sustainable practices from businesses, so do claims such as “environmentally friendly”, “sustainable production” and “compostable” become more prominent on supermarket shelves.
The ACCC says the misuse of these terms could reasonably mislead consumers and cause harm to those businesses that are doing the right thing when it comes to sustainability.
“Whilst some might regard such terms as ‘mere puffery’, they do carry meaning for consumers,” says Lowe, giving the keynote at the General Counsel Summit.
In the cosmetics industry, 73% made concerning claims, the ACCC sweep found. .
For clothing and footwear, it was 66% of businesses reviewed. And for the food and drink sector, 64%.
In competitive markets such as the food and drink sector, the ACCC has seen environmental claims, particularly those relating to recyclability, being used by businesses to influence a consumer's decision making process on what brand or product to choose.
Of the 25 energy businesses reviewed, the ACCC found 64% were making claims that raised concerns.
“Many consumers are conscious of the environmental impact of energy services,” says Lowe.
“The provision of energy involves a complex supply chain and there is a need for businesses to be transparent and make information clearly available to assist consumers in making informed decisions.”
The Consumer Policy Research Centre (CPRC) says its research has found Australian consumers are subjected to vague and unhelpful green claims.
In 24 hours, researcher documented 122 green claims across 17 sectors from groceries, personal care products, banking, and superannuation.
Only 39 of 122 green claims had any supporting evidence or verification to provide confidence that the claim was accurate or meaningful.
The Consumer Policy Research Centre says the worst and most unhelpful claims include generic statements that a consumer would have great difficulty understanding or using comparisons with another product.
Examples uncovered in CPRC’s research:
- “Banking you can feel good about” – Suncorp
- "Earth friendly” – SodaStream
- “Designed for a cooler planet” – Philips
“We need much clearer rules for terms like ‘recyclable’ and ‘compostable’ and guides for how businesses should meaningfully talk about their climate transition plans,” says CPRC chief executive Erin Turner.
“We would like to see the Australian Government consider a ban on vague and unhelpful green claims, similar to what the EU is currently exploring."
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