One in two companies found to overstate green credentials in ACCC review

An ACCC greenwashing crackdown uncovers a significant number of businesses deliberately misleading consumers – and the regulator has promised action.

The ACCC has warned it will start taking action against companies which deliberately mislead consumers by overstating their environmental credentials.

More than one in two companies surveyed by the Australian Competition and Consumer Commission were found to have overstated their clean or green credentials in a move which may expose them to legal action.

The ACCC said it was concerned at the level of greenwashing identified in a blitz of the advertising and packaging of 247 businesses.

The regulator found 57 per cent of the companies reviewed made inflated or wrong claims about their environmental impact, with the cosmetics, clothing, footwear, and food and drink industries the worst offenders.

ACCC deputy chair Catriona Lowe said these companies may find themselves the target of legal action or infringement notices to correct their statements or face fines.

Ms Lowe said the regulator would not tolerate greenwashing that wrongly gave the impression a product was more environmentally sensitive than it was.

“We’re seeing businesses not providing evidence of the claims they’re making,” she said.

“We are increasingly seeing consumers making their purchasing decision on the basis of the green credentials for their goods and services.”

Ms Lowe said the ACCC would not just stop at claims made on products, but would seek to scrutinise claims made by businesses around offsetting emissions or announcing environmental targets “without clear plans of how they’re going to achieve those goals”.

“It is possible of course that some of the claims that are being made are able to be verified but of course we’re standing in the shoes of the consumer,” she said.

The ACCC’s planned crackdown comes days after the Australian Securities and Investments Commission handed out court action against superannuation giant Mercer, over its green claims.

ACCC deputy chair Catriona Lowe

Ms Lowe said the ACCC would take a firm line on companies that misled or deceived consumers around their green credentials, warning fines could be levied into the millions.

“We will certainly be undertaking our assessment and thinking carefully about the impact on consumers and the gain that may have been obtained by making the false claims relative to the investment required to make the claim true,” she said.

A report by the ACCC notes the regulator will conduct further analysis of these issues and is planning to produce and release “economy-wide guidance material, as well as targeted guidance for specific sectors” outlining expectations around green claims.

Ms Lowe said the regulator was concerned about companies making claims packaging could be recycled when those products could not be accepted by most recyclers.

An ACCC spokeswoman said the regulator was engaging with “relevant industry participants” in a bid to ensure clarity and transparency about handling soft plastics recycling after the REDcycle scheme collapsed.

The NSW Supreme Court ordered on Monday to wind up the REDcycle company after finding it was hopelessly insolvent and failed to pay fees for storing thousands of tonnes of soft plastics around the country.

“The ACCC is conscious of the significant financial and environmental impacts if food and grocery suppliers were to dispose of existing packaging containing the REDcycle logo and Australasian Recycling Label (ARL) ‘return to store’ labelling in landfill,” the spokeswoman said.

“We have engaged with industry participants about taking all reasonable alternative steps to ensure that representations to consumers are accurate. For example, this could be achieved through information provided in their other advertising and marketing.”