ACCC lists eight principles to avoid greenwashing in advertising and marketing

The ACCC has published eight principles to help organisations ensure any environmental advertising or marketing does not contain greenwashing.

The principles comprise the ACCC’s final guidance on environmental claims, which sets out the consumer watchdog’s view of good practice when making environmental claims, as well as making businesses aware of their obligations under the Australian Consumer Law.

Catriona Lowe, acting chair at the ACCC said this final guidance helps to demonstrate how businesses can make clear, evidence-based environmental claims that consumers can understand and trust.

“Environmental claims are useful for consumers when they can easily understand what the environmental benefit is, and if there are any restrictions that can limit this benefit,” she said.

Ensuring such claims are clear and accurate not only helps consumers make purchasing choices, but also means the right incentives are in place for businesses to compete fairly and differentiate themselves based on genuine investment and innovation.

Lowe said as businesses transition to a greener economy, we need businesses to drive market innovation by investing in and choosing products and services with the lowest environmental impact.

“For consumers to drive change, they need to be able to trust that the products and services they are buying genuinely are sustainable, and businesses making real efforts to deliver benefits should not be disadvantaged by rivals making disingenuous claims,” she said.

The eight key principles are:

• Make accurate and truthful claims
• Have evidence to back up your claims
• Don’t hide or omit 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

The final guidance incorporates feedback from over 150 stakeholders across consumer, business and environmental organisations on the ACCC’s draft version of the guidance.

“Misleading environmental and sustainability claims continue to be an enforcement and compliance priority for the ACCC, and we have several active investigations underway,” Lowe said.

“Our final guidance is intended to improve compliance by helping businesses make meaningful and truthful claims that meet their obligations under the Australian Consumer Law.”

The ACCC said is aware that many businesses have genuinely changed how they operate in response to consumers’ increased environmental consciousness.

Where a business has genuinely changed how they operate to be more sustainable, Lowe said she wants them to have the confidence to tell their customers about these changes.

“We also want them to be able to legitimately market their products or services to consumers seeking a more sustainable option,” she said.

Environmental claims are often technical and can be difficult for businesses to communicate clearly, Lowe noted.

“By following the principles in our guidance, businesses can more confidently make meaningful claims that consumers can understand and trust,” she said.

“It is important for businesses to consider whether they are exaggerating the environmental benefits of their product or services and whether they have a reasonable basis to make the claims, otherwise they risk breaching the Australian Consumer Law.”