What is ‘Greenwashing’ and why does it matter?

Greenwashing is the practice of making misleading claims about the environmental impact or sustainability of your product or business. Importantly, misleading claims may strictly be ‘true’ but omit crucial information and therefore confuse consumers. Similarly, a correct statement may be paired with an image which provides the audience with a false impression.

Although the term has been around since the 80s,[mfn]The term ‘greenwash’ was coined by environmentalist Jay Westerveld in 1986.[/mfn] it has taken on new importance in this era of environmentally-conscious consumers and purpose-driven organisations. Being willing to switch brands or pay a premium for eco-friendly products and services doesn’t imbue the consumer with insight into the science behind the claims. The same is true of marketing teams, copy-writers and agencies producing collateral for green brands. So how can businesses safely discuss their good faith efforts with the market?

The ACCC declares its intention to crack down

In October 2022, the Australian Competition & Consumer Commission (ACCC) conducted an ‘internet sweep’ of almost 250 brands,[mfn]Greenwashing by businesses in Australia: Findings of the ACCC’s internet sweep of environmental claims, March 2023 at page 4: https://www.accc.gov.au/system/files/Greenwashing%20by%20businesses%20in%20Australia.pdf[/mfn] looking for statements about environmental impact and sustainability that may confuse consumers. Rather than looking for specific breaches of the Australian Consumer Law, the review focused on whether or not consumers would understand the claims being made. However, with the finding that 57% of businesses were making ‘concerning claims’[mfn]Ibid at page 1.[/mfn], and the ACCC declaring an intention to undertake ‘a more targeted assessment’,[mfn]Ibid at page 9.[/mfn] it is clear that we can expect a crackdown.

Putting the ACCC’s draft guidelines into practice

To help businesses avoid fines and legal proceedings, the ACCC published draft guidelines outlining 8 practical principles to consider when making environmental and sustainability claims.[mfn]Environmental and sustainability claims: Draft guidance for business, July 2023 https://www.accc.gov.au/system/files/Environmental%20and%20sustainability%20claims%20-%20draft%20guidance%20for%20business_web.pdf[/mfn]

The guidelines provide insight into how to provide clear, accurate and trustworthy information to consumers, and thereby avoid contravening the Australian Consumer Law (the ACL).


What you can do today
Relevant principles

Figure out what you can and can’t say

  • Create a bank of “pre-approved” claims where the evidence is clear, the wording is specific, and it’s been signed off by your Compliance team. Keep the list up-to-date with regular reviews.
  • Understand and educate colleagues on not just the claims you’re making but the evidence behind them, including claims which project or predict an impact. If you’re not delivering on your promises, what’s true now may become misleading in the future.
  • Avoid high-risk, overly broad claims such as “green” and “sustainable”, to reduce the danger of misleading your audience.
  • Implement processes and incorporate tools that ensure marketing teams always use the most up-to-date and accurate wording.  

Principle 1: Make accurate and truthful claims

Principle 3: Don’t leave out or hide important information

Principle 5: Avoid broad and unqualified claims

Principle 8: Be direct and open about your sustainability transition

Create and circulate disclaimers

  • Spend the time to create and circulate disclaimers for each channel and product line. Provide clear guidelines to your stakeholders about how prominent the disclaimers need to be, and where they need to appear.
  • Work with Compliance to update and communicate changes to disclaimers, ensuring sufficient explanation and notice is given. 
  • Adopt intelligent tools which can automatically scan collateral to identify missing, or insufficiently prominent, environmental / sustainability disclaimers.

Principle 4: Explain any conditions or qualifications on your claims

Principle 5: Avoid broad and unqualified claims

Centralise and scale

  • Store previously approved marketing assets and images centrally for ease of reference, enabling colleagues to meet their campaign deadlines without jeopardising the brand.
  • Create a repository of proof regarding the claims being made, to allow both reviewers to quickly assess new wording or formulations against established evidence. 
  • Make sure policies about use of third party certifications are clear, well-understood and easy to apply. 
  • Don’t rely on policies being adhered to at time of publication, leverage technology to introduce regular scans of your online presence to remove out of date information without distracting your Marketing team from generating new leads.

Principle 2: Have evidence to back up your claims

Principle 7: Visual elements should not give the wrong impression

Assess your content readability

  • Use a readability test, such as the Flesch-Kincaid score in Microsoft Word, to assess reading age. Making copy easy to understand should maximise its impact with even savvy consumers, while also derisking your claims.
  • Consider this question early in the content-creation process to cut down on rewrites. Readability assessments can easily be incorporated at every stage from copy-writing to design and then final checks with technology like Red Marker’s Word plug-in and Figma plug-in.
Principle 6: Use clear and easy-to-understand language

Whether your marketing claims touch on environmental impact and sustainability or not, complying with the ACL is not optional for Australian businesses. Red Marker’s sophisticated AI-powered software helps Marketing and Compliance teams achieve a shared goal of clear, compliant and engaging marketing. Using Red Marker’s Word and Figma plug-ins, organizations can generate and evaluate promotional content swiftly and efficiently, while the Approvals feature keeps Compliance teams in the loop for final checks. Legal teams can effectively publish a bank of up-to-date disclaimers and Red Marker will advise creative teams about where those disclaimers need to appear.

With just a click of a button, organizations can scan and analyze all their customer-facing sites to check for out-dated promotions and defunct claims. Using Red Marker, your teams can turn their attention from compliance worries to driving marketing excellence.


Use Red Marker to align with the ACCC’s 8 Principles

Principle 1: Make accurate and truthful claims Automatically identify misleading phrases and high risk wording.
Principle 2: Have evidence to back up your claims Central repository of pre-approved material making substantiated claims.
Principle 3: Don’t leave out or hide important information Scan live web content to check for errors or risks. Adopt custom risk detection to apply niche industry regulations and ensure key information is never omitted.
Principle 4: Explain any conditions or qualifications on your claims Ensure all disclaimers are present and correct. Periodically review all disclaimers and update them with immediate effect.
Principle 5: Avoid broad and unqualified claims Flag and modify high risk wording.
Principle 6: Use clear and easy-to-understand language Readability tools to ensure content is clear and accessible for the intended audience.
Principle 7: Visual elements should not give the wrong impression AI-powered image classification to determine suitability in relation to your claims. Custom logic helps identify inadvertent outcomes from proximity between images and statements.
Principle 8: Be direct and open about your sustainability transition Central repository of pre-approved material ensures consistent messaging across teams and channels. 


Click here to contact us if you’d like to book a 30-minute discovery call to walk through your marketing compliance processes and needs.


Disclaimer: this content is only a summary and general overview. It is not intended to be comprehensive and does not constitute legal advice. You should seek legal or other professional advice particular to your circumstances before acting or relying on this content.


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