The ACCC has revealed draft guidelines designed to enhance the reliability of green claims made by businesses.
This action is on the back of a previous study by the ACCC, which disclosed that 57% of investigated companies were making dubious claims about their environmental virtues.
The regulator has expressed its intent to probe companies suspected of greenwashing. Additionally, the ACCC plans to embark on education campaigns for businesses and revise guidance to bolster the credibility of environmental claims.
ACCC Chair Gina Cass-Gottlieb emphasised that businesses making false or misleading claims not only erode consumer trust in all green claims, but they also place their counterparts implementing authentic sustainable practices at a competitive disadvantage.
The ACCC’s proposed rules revolve around eight main principles. These principles stress on businesses ensuring their environmental claims are factual, precise, and verifiable; refraining from concealing critical information; outlining any conditions or qualifications for green claims; sidestepping broad and unqualified terms like “sustainable” or “eco-friendly”; using plain and easy-to-understand language; guaranteeing visual elements’ accuracy; and being transparent about their sustainability transition journey.
Notably, the draft guidance incorporates details about the ACCC’s approach to compliance and enforcement. The penalties for making false or misleading representations could reach up to $50m, or triple the assessed value of the benefit gained from the violation.
ACCC Chair Gina Cass-Gottlieb said, “False or misleading claims can undermine consumer trust in all green claims, particularly when consumers are often paying higher prices based on these claims.”
“If you make a claim about the environmental or sustainability benefits of your product or service – make sure it’s right, and if you are unsure or can’t substantiate these claims, then don’t make the claim.”
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