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ACCC investigation reveals misleading green claims are rife
The consumer watchdog has conducted an online sweep of business’s environmental claims and vows more action to come.
Last updated: 2 Mar 2023
The Australian Competition and Consumer Commission (ACCC) has put companies making false and exaggerated claims about their environmental credentials on notice after conducting an online sweep of business claims.
The Commission released a report today outlining the findings of their sweep, conducted last year, saying that of the 247 businesses analysed, more than half (57%) made ‘concerning’ claims.
“Our sweep indicates a significant proportion of businesses are making vague or unclear environmental claims. This warrants further scrutiny,” ACCC deputy chair Catriona Lowe says.
Unfortunately, it appears that rather than making legitimate changes to their practices and procedures, some businesses are relying on false or misleading claims
ACCC deputy chair, Catriona Lowe
“Consumers are now, more than ever, making purchasing decisions on environmental grounds. Unfortunately, it appears that rather than making legitimate changes to their practices and procedures, some businesses are relying on false or misleading claims. This conduct harms not only consumers, but also those businesses taking genuine steps to implement more sustainable practices.”
The ACCC also says that companies claiming to be green or environmentally friendly must be able to back up their claims with scientific evidence and the Commission won’t hesitate to ask for proof.
“Already, we have several active investigations underway across the packaging, consumer goods, food manufacturing and medical devices sectors for alleged misleading environmental claims and these may grow, as we continue to conduct more targeted assessments into businesses and claims identified through the sweep,” Lowe says.
“We will take enforcement action where it is appropriate to do so as it is critical that consumer trust in green claims is not undermined.”
The three sectors with the highest number of ‘concerning’ environmental claims identified by the ACCC were cosmetics and personal care; textiles, garments and shoes; and food and beverages.
Consumer groups welcome the action
Consumer rights groups welcomed the ACCC report and the new focus on environmental issues and claims made online and in stores.
“We know from research that many consumers want to make more sustainable choices but aren’t sure which products they can trust. This report shows why so many consumers are confused. There is a litany of environmental labels, many of them without any processes or evidence to back them up,” CHOICE CEO Alan Kirkland says.
“What makes it worse is that businesses often charge a premium for environmental products.”
Erin Turner, CEO of the Consumer Policy Research Centre says the findings of the ACCC were not surprising and showed that the ‘status quo’ was not working for consumers.
“The report clearly demonstrates that Australian consumers are subjected to vague and unhelpful green claims,” she says.
We would like to see the Australian Government consider a ban on vague and unhelpful green claims
Consumer Policy Research Centre CEO, Erin Turner
“We need much clearer rules for terms like ‘recyclable’ and ‘compostable’ and guides for how businesses should meaningfully talk about their climate transition plans.
“We would like to see the Australian Government consider a ban on vague and unhelpful green claims, similar to what the European Union is currently exploring,” Turner adds.
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