Greenwashing claims impact net zero targets: ACCC deputy chair

The ACCC’s crackdown on businesses making false statements about their sustainability efforts is not only about protecting consumers but creating a “level playing field” for companies in reaching their net zero targets, this is according to Catriona Lowe, deputy chair at the ACCC.

Speaking to attendees at the General Counsel Summit, Lowe said 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.

“This can disincentivise businesses to continue investing in more sustainable products. And if we are to reach our net zero targets, we need both businesses and consumers to drive market innovation by investing in and choosing products with the lowest environmental impact,” she said.

Earlier this year, the ACCC reinforced its focus on environmental claims and sustainability as an enforcement and compliance priority, broadening it to also include its work in competition and product safety.

Research conducted by the Consumer Policy Research Centre in 2022 suggests that 45 percent of Australians always or often consider sustainability as part of their decision-making process when making a purchase.

Lowe noted that consumers are often willing to pay more for a product or service due to the environmental or sustainability benefit they are promised.

“False or misleading claims can undermine consumer trust in all green claims, particularly when they’re paying higher prices based on these claims,” she added.

In March, the consumer watchdog began investigating greenwashing claims following an internet sweep it conducted in late 2022.

Lowe said while the ACCC isn’t the ESG regulator, it has set priorities on how its competition and consumer protection tools can assist in helping to address the big, long-term challenges facing Australia.

“Today’s consumers are concerned about the environment and sustainability, and these concerns are increasingly reflected in their purchasing decisions,” she said.

“Businesses are responding to this consumer demand for sustainable products, leading to a significant shift in how products are produced, marketed, and delivered to consumers.”

Lowe said for consumers to drive markets, they need to be able to trust that the products they are buying genuinely are sustainable.

“And once a consumer has had their trust broken by a misleading green claim, this, understandably, has a significant impact on their likelihood to trust these claims again,” she explained.

“The ACCC understands that increasingly more consumers are walking away from relying on environmental claims because this trust has been broken.”

In July, the ACCC released a draft guidance to help reduce greenwashing claims from businesses and help consumers not get tricked by these types of claims.