ACCC lays down 8 principles for green claims by business
Environmental benefits must be evidence-based, accurate and expressed in clear language, the regulator says.
The ACCC has finalised its guidance on green claims by businesses with a set of eight principles to ensure advertising about environmental benefits is clear and accurate.
The regulator said it was important that businesses did not exaggerate green claims and had evidence to back them up so that consumers could make informed choices.
ACCC acting chair Catriona Lowe said the guidelines would also incentivise businesses to compete fairly and differentiate themselves based on genuine investment and innovation.
“As we transition to a greener economy, we need businesses to drive market innovation by investing in and choosing products and services with the lowest environmental impact,” Ms Lowe said.
“For consumers to drive change, they need to be able to trust that the products and services they are buying genuinely are sustainable, and businesses making real efforts to deliver benefits should not be disadvantaged by rivals making disingenuous claims.”
“Where a business has genuinely changed how they operate to be more sustainable, we want them to have the confidence to tell their customers about these changes. We also want them to be able to legitimately market their products or services to consumers seeking a more sustainable option.”
“Environmental claims are often technical and can be difficult for businesses to communicate clearly. By following the principles in our guidance, businesses can more confidently make meaningful claims that consumers can understand and trust.”
The guidance was finalised after incorporating feedback from over 150 stakeholders on a draft version released in July.
Its eight key principles:
- Make accurate and truthful claims.
- Have evidence to back up your claims.
- Don’t hide or omit important information.
- Explain any conditions or qualifications on your claims.
- Avoid broad and unqualified claims.
- Use clear and easy-to-understand language.
- Visual elements should not give the wrong impression.
- Be direct and open about your sustainability transition.
Ms Lowe said the ACCC was aware that many businesses had genuinely changed in response to increased environmental concerns but misleading green claims remained an enforcement priority with several investigations underway.
“It is important for businesses to consider whether they are exaggerating the environmental benefits of their product or services and whether they have a reasonable basis to make the claims, otherwise they risk breaching the Australian Consumer Law,” Ms Lowe said.
“Environmental claims are useful for consumers when they can easily understand what the environmental benefit is, and if there are any restrictions that can limit this benefit.”
As part of its 2023–24 compliance and enforcement priorities, the ACCC will be prioritising consumer, product safety, fair trading and competition concerns concerning environmental and sustainability claims. It will release further guidance early next year on emission and offset claims, as well as the use of trust marks.
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