Senate to shine spotlight on concerning greenwashing behaviour

On 29 March 2023, the Senate announced a landmark inquiry into the practice of greenwashing in Australia, with its final report due for publication by 5 December 2023.

This development echoes growing concerns both in Australia and globally regarding greenwashing by businesses across a range of sectors, including the making of vague, false or misleading claims regarding a business’, or its products’ or services’ environmental, sustainability and ethical credentials.

In recent times, we have seen increasingly clear messaging from regulators, including ASIC and the ACCC, concerning conduct in this space[1] and a number of regulatory actions being brought against businesses in relation to their unsubstantiated and misleading green claims[2].

Under its terms of reference, the Senate inquiry and its subsequent report will focus on the following key issues:

1. the environmental and sustainability claims made by companies in industries including energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing and footwear;
2. the impact of misleading environmental and sustainability claims on consumers;
3. domestic and international examples of regulating companies’ environmental and sustainability claims;
4. advertising standards in relation to environmental and sustainability claims;
5. legislative options to protect consumers from greenwashing in Australia; and
6. any other related matters.

The Senate is currently calling for submissions from interested stakeholders which are due by 8 June 2023.

Businesses should now be on notice that the government and regulators are cracking down on practices that might be considered to be greenwashing, and should closely consider how they are promoting their green credentials, particularly in public documents and marketing material. Otherwise they risk investigation by regulators, or litigation (which may be brought by regulators or in some cases competitors or even affected members of the public) under the Australian Consumer Law or the Corporations Act.

Indeed as we mentioned in a previous article , ASIC has recently issued a report outlining the 35 regulatory actions regarding greenwashing claims that it has taken in the period from 1 July 2022 to 31 March 2023 alone.

For guidance on what might constitute greenwashing, see our tips and guidance in our articles in the footnotes, our contact us for further advice.

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Authored by:
Antoine Pace, Partner
Eve Lillas, Associate

[1] https://www.gadens.com/legal-insights/greenwashing-erodes-consumer-trust-the-accc-tells-business-to-clean-up-its-act-on-misleading-environmental-claims/; https://www.gadens.com/legal-insights/accc-internet-sweep-uncovers-concerning-environmental-and-sustainability-claims/

[2] https://www.gadens.com/legal-insights/regulatory-action-for-greenwashing-is-upon-us/; https://www.gadens.com/legal-insights/asic-commences-its-first-greenwashing-court-proceeding/