Companies in high-polluting industries need to be extra careful about claiming individual improvements to their environmental credentials because regulators may take the overall impact of the sector into account, a watchdog has warned.

The Australian Competition and Consumer Commission has put companies that rely on or sell fossil fuels on notice they need to be “particularly careful not to understate” their overall environmental footprint, or risk fines of more than $50 million under a crackdown on greenwashing and false declarations.