The ACCC announced on Tuesday that it will soon be commencing an internet sweep of various environmental claims made by Australian businesses.
Speaking to the Sydney Morning Herald Sustainability Summit on Tuesday, ACCC deputy chair, Delia Rickard, issued a warning to businesses who make false or misleading claims, noting that their actions undermine consumer trust and confidence in the market.
“Unfortunately, the ACCC is hearing growing concerns that some businesses are falsely promoting environmental or green credentials to capitalise on changing consumer preferences,” Ms Rickard said.
“We are also seeing more businesses engage in corporate rebranding to appear ‘greener’,” Ms Rickard noted.
In particular, she explained, the use of broad terms like ‘environmentally friendly’, ‘green’, or ‘sustainable’ may mislead consumers, as these words “rarely provide enough information about what that exactly means in terms of the product or service consumers are considering purchasing”.
According to Ms Rickard, data gathered by the ACCC through its internet sweep will be used to update guidance for business and information for consumers on environmental claims.
Ms Rickard stressed that businesses need to back up the claims they are making, whether through “reliable scientific reports, transparent supply chain information, reputable third-party certification, or other forms of evidence”.
“Where we have concerns, we will be asking businesses to substantiate their claims,” Ms Rickard said, adding that the ACCC is likely to take enforcement action where it determines that consumers are being misled or deceived by green claims.
“The ACCC won’t hesitate to take enforcement action where we see that consumers are being misled or deceived by green claims — just as we did against VW for false representations about compliance with Australian diesel emissions standards. In that matter, the Court ordered VW to pay $125 million in penalties,” she said.
While the ACCC currently plays a role in ensuring that businesses tell the truth, Ms Rickard said that moving forward, there will also be roles for standards bodies, certification schemes, industry and government via policy reform.
Ultimately, the ACCC’s goal is to improve the veracity of environmental claims to protect consumers and safeguard competitive conduct in the market.
“Many businesses go to extraordinary lengths to make their processes, products and services more sustainable. This innovation and investment should be protected from unscrupulous behaviour of other businesses making green claims without incurring the same costs,” said Ms Rickard.
“This can have a chilling effect on investment in this space, as businesses are not able to realise the full benefits of making environmental improvements.”
Ms Rickard assured that the ACCC will also be seeking to provide practical guidance to businesses through its work on this “compliance and enforcement priority”.
