The Australian Competition and Consumer Commission (ACCC) revealed on March 2 that of the 247 businesses investigated, over half (57 percent) were making “vague or unclear” environmental claims – a practice known as “greenwashing”. The sweep was conducted to identify misleading environmental marketing claims in sectors such as energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing, and footwear.
“Consumers are now, more than ever, making purchasing decisions on environmental grounds,” said ACCC Deputy Chair Catriona Lowe. “Unfortunately, it appears that rather than making legitimate changes to their practices and procedures, some businesses are relying on false or misleading claims.”
High-profile examples of greenwashing include L’Oréal, P&G, and L’Occitane, and in May 2022, beauty company Bondi Sands was sued for falsely advertising its sunscreens as “reef-friendly”. Swedish fast fashion giant H&M was also sued in 2019 for misleading claims that its clothing line, Conscious Choice, was environmentally friendly.
The ACCC fined solar and gas firm Tlou Energy $53,280 (US$34,625) for “greenwashing” and claiming its electricity production was carbon neutral in October 2022.
Lowe warned that false “green” marketing not only harms consumers but also businesses that are doing genuine work to improve the sustainability of their products. Companies are required to provide evidence such as reliable scientific reports, transparent supply chain information, and reputable third-party certification if they are using broad claims like “environmentally friendly,” “green,” or “sustainable”.
Recent surveys reveal concerns around the environmental impact of products was among the top concerns for consumers. A survey by Deloitte in 2020 revealed the biggest lifestyle change by consumers was cutting down on single-use plastics, followed by shopping for brands with environmentally sustainable values. Accenture conducted a survey of 6,000 consumers in 11 countries across North America, Europe and Asia in 2019, which found 83 percent of respondents believed it was important for companies to design products that can be reused or recycled. Nearly three-quarters said they’re currently buying more environmentally friendly products than they were five years ago, and an overwhelming 81 percent believe they would buy more over the next five years.
Lowe encouraged businesses to take steps to ensure that environmental credentials made are accurate and meaningful, and importantly, “come forward” if they become aware they have made misleading marketing claims. “Our sweep has shown that claims are most useful when they are relevant, clear, reliable and transparent,” she noted. “Businesses who cooperate and advise of any issues with their operations, will be considered more favourably than those who wait for the ACCC to unearth these problems.”