The Australian Competition and Consumer Commission (ACCC) has completed its anticipated internet sweep following clear messaging last year that the regulator would crackdown on misleading environmental claims. More than half of the businesses that were subject to the ACCC’s internet sweep in October 2022 were considered to have made concerning misleading claims about their environmental or sustainability practices. While the sweep covered businesses operating in eight different sectors, a high proportion of ACCC’s concerns were regarding claims made by businesses in the cosmetic, clothing and food and drink sectors.
The internet sweep follows announcements from the ACCC regarding the prevalence of misleading green claims by businesses (as set out in our article available here) as well as Australian Securities and Investments Commission (ASIC) issuing infringement notices for greenwashing (see our further article available here). In this e-update, we detail the ACCC’s findings from the internet sweep and note developments on
enforcement actions taken by regulators against greenwashing.
On 2 March 2023, the ACCC published its report on its findings from the internet sweep entitled Greenwashing by businesses in Australia – Findings of the ACCC’s internet sweep of environmental claims. At a high level, the report identifies the following key issues in relation environmental claims by business which are likely to mislead or deceive consumers:
The ACCC now has several active investigations underway for misleading environmental claims and has highlighted its intention to undertake appropriate enforcement and compliance actions in its report. The ACCC crackdown on greenwashing has also been bolstered by various stakeholders, including Greenpeace Australia Pacific’s complaint to the ACCC to investigate whether environmental claims by Toyota regarding its vehicles performance and net zero targets are misleading and deceptive.
ASIC has also taken action on greenwashing claims, particularly in the financial sector. In February, ASIC launched its first court proceeding against alleged greenwashing conduct by Mercer Superannuation (Australia) Limited (Mercer) in the Federal Court (see our article here). Mercer marketed its “Sustainable Plus” investment options to members who were committed to sustainability because they excluded investments in companies involved in carbon intensive fossil fuels like thermal coal. However, a sustainable investment policy document on Mercer’s website qualified that these investment options were subject to additional exclusions which included companies involved in, among other things, carbon intensive fossil fuel. ASIC claims these statements mislead consumers about the sustainable nature and characteristics of certain superannuation investment options.
Businesses should critically review all sustainability and environmental claims made by their organisation, including in their marketing collateral as well as public reports or statements. This should include product packaging and information, website content, digital or print advertisements and social media posts by influencers. Businesses should also ensure any company-wide claims in its corporate social responsibility statements and reporting documents are accurate, specific and backed by sufficient evidence. When reviewing your marketing material and making decisions regarding promoting your business’ green credentials, guidance can be taken from the key issues outlined by the ACCC in their report as set out in this article, as well as helpful tips set out in our previous article available here.
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Authored by:
Antoine Pace, Partner
Eve Lillas, Associate