It’ll all come out in the greenwash: the ACCC’s guidance on how Australian businesses can avoid fines and reputational damage

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to consider when making environmental and sustainability claims.[mfn]Environmental and sustainability claims: Draft guidance for business, July 2023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).

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

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.