"Avoid broad and unqualified claims": Consumer watchdog releases environmental messaging guidance

"Where a business has genuinely changed how they operate to be more sustainable, we want them to have the confidence to tell their customers about these changes," says ACCC acting chair Catriona Lowe.

Within a week of sending a warning shot over fake business reviews and influencer transparency, the consumer watchdog has released a 42-page guidance document that addresses another major issue of concern under investigation - greenwashing.

In March this year the Australian Competition and Consumer Commission (ACCC) revealed that a sweep of more than 200 businesses showed more than half exaggerated their environmental claims, noting a proliferation of vague and unqualified proclamations with terms like ‘green’, ‘kind to the planet’, ‘eco-friendly’, ‘responsible’ or ‘sustainable’ to describe products.

To address the matter head on, the regulator published draft guidance on environmental and sustainability claims in July, yielding feedback in response from more than 150 stakeholders across consumer, business and environmental organisations.

That feedback has been incorporated into the ACCC's Making environmental claims: A guide for business, which includes eight principles to help businesses ensure any environmental marketing and advertising claims they make about their products or services are clear and accurate, and do not mislead consumers.

The ACCC's 8 principles for environmental claims

1. Make accurate and truthful claims
2. Have evidence to back up your claims
3. Don’t hide or omit important information
4. Explain any conditions or qualifications on your claims
5. Avoid broad and unqualified claims
6. Use clear and easy-to-understand language
7. Visual elements should not give the wrong impression
8. Be direct and open about your sustainability transition

ACCC acting chair Catriona Lowe says the final guidance shows how businesses can make clear, evidence-based environmental claims that consumers can understand and trust, putting the right incentives in place for fair competition where a company can differentiate itself based on genuine investment and innovation.

"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," Lowe explains.

"As we 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."

The ACCC is aware that many businesses have genuinely changed how they operate in response to consumers’ increased environmental consciousness, and the final guidance is intended to improve compliance by helping businesses make meaningful and truthful claims that meet their obligations under the Australian Consumer Law.

"Where a business has genuinely changed how they operate to be more sustainable, we want 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," says Lowe.

"Environmental claims are often technical and can be difficult for businesses to communicate clearly. By following the principles in our guidance, businesses can more confidently make meaningful claims that consumers can understand and trust.

In early 2024, the ACCC will release further guidance for businesses and consumers on emission and offset claims, as well as the use of trust marks.

The ACCC will also develop guidance to help consumers confidently assess and rely on environmental claims.

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