If you manage a business, beware of making false or misleading claims about sustainability! That’s called ‘greenwashing’. The ACCC (Australian Competition & Consumer Commission) has recently updated its guidance for businesses about making environmental and sustainability claims.

The ACCC identified a strong need for clear guidance following a review of Australian businesses’ environmental claims earlier this year. In a sweep across businesses in different sectors, the ACCC found that a staggering 57% of businesses reviewed were making misleading environmental or sustainability claims.

Dangers of greenwashing

Misrepresenting how environmentally friendly, sustainable or ethical a business’s products, services or practices are is not good for a business or its customers. Greenwashing might make a business look ‘green’ on the surface, but it is unethical, potentially damaging to brand reputation if found out, and may be illegal.

For businesses making genuine efforts to improve sustainability, greenwashing is bad news. Climate-conscious customers are becoming more interested in responsible purchasing, which means they are looking for sustainable products, services and business practices. As a result, businesses making genuine claims are disadvantaged by those who make misleading claims without investing time and money into proven sustainability measures.

“False or misleading claims can undermine consumer trust in all green claims, particularly when consumers are often paying higher prices based on these claims. 
Gina Cass-Gottlieb, ACCC

Knowing which sustainability claims to trust is an issue for businesses as well as consumers. When considering sustainability along their supply chain, a business is usually a purchaser as well as a provider.

Principles to reduce the risk of greenwashing

The ACCC’s guidance provides eight principles for making trustworthy environmental and sustainability claims:

1. Make accurate and truthful claims
2. Have evidence to back up your claims
3. Don’t leave out or hide important information
4. Explain any conditions or qualifications on your claims
5. Avoid broad and unqualified claims
6. Use clear and easy-to-understand language
7. Visual elements should not give the wrong impression
8. Be direct and open about your sustainability transition

Understanding environmental claims

If you are involved in managing or marketing a business, read the ACCC guide for businesses for more detailed pointers on how to make trustworthy environmental claims.

For help analysing or questioning the environmental claims of businesses you buy from, see the ACCC guide for consumers. You can also find practical guidance in the Green Street Inspiration post on greenwashing and environmental claims.

Further information

• Download the ACCC guide on Environmental Claims (PDF, 2.2Mb)
• Greenwashing by businesses in Australia – findings of ACCC’s internet sweep
• Press release: ACCC releases 8 principles to guide businesses’ environmental claims
• Avoiding Greenwashing, Bluewashing and Other Forms of Corporate Whitewashing Webinar hosted by UN Global Compact Network Australia (UNGCNA)

Related Green Street Resources

• Inspiration: 5 ways to beat greenwashing and identify genuine environmental claims (practical guidance)
• Sustainable Procurement Tool & Guide (tool to measure the sustainability of potential purchases)
• Sustainability Roadmap (survey & guide to identify priorities and track progress)
• Sustainability Planning Process (template and checklist to create a plan based on the Roadmap)
• How to use your purchasing superpower responsibly (tips and inspiration about responsible purchasing/procurement)

Green Street News | Published 02 December 2023