The Australia Competition and Consumer Commission’s (ACCC) recently published draft guidance identifies eight principals businesses can focus on when making environmental claims.
The draft guidance is aimed at improving the integrity of environmental and sustainability claims made by businesses and protect consumers from ‘greenwashing’.
According to the draft guidance, false or misleading environmental claims:
- Limit a consumer’s ability to make informed choices
- Lead consumers to pay more for the value of an environmental benefit that doesn’t exist
- Unfairly disadvantage businesses which do make significant investments in genuinely pursuing more sustainable products or service
- Undermine consumer trust in environmental claims in general and can create a disincentive for businesses to invest in more sustainable practices.
“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,” ACCC Chair Gina Cass-Gottlieb said in a press release.
“False or misleading claims can undermine consumer trust in all green claims, particularly when consumers are often paying higher prices based on these claims.”
“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.”
By following the eight principles below, businesses are less likely to mislead consumers and contravene the Australian Consumer Law.
- Make accurate and truthful claims
- Have evidence to back up your claims
- Don’t leave out or hide important information
- Explain any conditions or qualifications on your claims
- Avoid broad and unqualified claims
- Use clear and easy-to-understand
- Visual elements should not give the wrong impression
- Be direct and open about your sustainability transition
The ACCC is seeking feedback from businesses, consumers and other stakeholders on the draft guidance.
“We would like to hear from businesses on whether our draft guidance improves their confidence in making legitimate environmental and sustainability claims as well as if they have seen concerning green claims made by other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,” Ms Cass-Gottlieb said.
“We also want to hear from consumers on how businesses can provide useful and relevant information about any green claims so they can be confident in the accuracy of these claims.”
ICN National Office CEO Warren Jansen welcomes the draft guidance and encourages small and medium enterprises to provide feedback to the ACCC.