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Australia: ACCC issues new draft greenwashing guidance

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In brief

With the rapid rise of environmental consciousness in Australia and abroad, consumer-facing businesses are increasingly making claims about the environmental qualities of their products, services and business operations.  While the ACCC has had guidance on the practice of “greenwashing” for some time (link here), policing of environmental and sustainability claims has been a core area of focus for the ACCC in the last 12 months.

In October 2022, the ACCC launched an internet sweep of the websites of 247 businesses in order to identify potentially misleading environmental and sustainability claims. In March 2023, the ACCC released its findings that 57% of businesses reviewed made environmental and sustainability claims that were potentially misleading (see the ACCC’s report here).

On July 14, 2023, the ACCC has released its draft guidance for business on environmental and sustainability claims (Draft Guidance) for consultation, aimed at addressing the ACCC’s concerns arising from its internet sweep. Submissions on the Draft Guidance are due to the ACCC by 15 September 2023.

The Draft Guidance sets out the ACCC’s view on good practice for making environmental and sustainability claims, and identifies the following 8 principles to assist businesses in making claims that comply with the Australian Consumer Law (ACL):

  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

With breaches of the ACL attracting penalties of up to AUD $50M, three times the value of the benefit obtained from the breach, or 30% of the company’s adjusted turnover during the breach period, it is critical for businesses to understand their obligations when making environmental claims.

For advice in navigating risks associated with making environmental claims, or for assistance with submissions on the Draft Guidance, please contact our team of experts.

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Author

Amy Middlebrook is a partner in Australia's Dispute Resolution group. Amy is also a member of the Firm's Healthcare and Consumer Goods & Retail Industry Groups. She has practiced in both Australia and the United States. Amy has experience handling complex commercial disputes across many areas of law, with particular expertise in corporations law (including director and officer liability), misleading advertising claims and product liability. Her experience included work in the Federal Court and Supreme Courts of New South Wales, Victoria and Western Australia. Amy's work has also involved class actions, representation in tribunals and dealings concerning the ACCC and ASIC. Amy has a background in Pharmacology and has advised healthcare clients on regulatory matters, including with respect to TGA requirements, industry code compliance and pricing and reimbursement.

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Elisabeth White is a partner in Baker McKenzie's Sydney office. Elisabeth has over 15 years' experience as an intellectual property and regulatory advisor, focusing upon IP protection and enforcement with a particular emphasis on regulated industries and related disputes. Elisabeth is described in Asia Pacific Legal 500 as providing “decisive expert opinion and a pragmatic approach”. She has been featured in Best Lawyers - Intellectual Property listed annually since 2013. Elisabeth advises market leading companies in the healthcare, food, FMCG and technological sectors in relation to IP protection , regulatory matters and disputes. She handles a broad range of contentious matters, including Australian Federal Court litigation concerning patents, trade marks, passing off and trade practices issues. Elisabeth advises life sciences, food and consumer goods companies regarding regulatory issues related to the marketing and sale of their products, including product labelling, advertising and promotion, interactions with consumers and healthcare professionals, adverse events and recalls, pricing and reimbursement.

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Georgina Foster is a partner in Baker McKenzie's Sydney office and leads the Firm’s Australian competition practice. Georgina is a leading merger clearance lawyer. She also regularly advises clients on competition law issues relating to joint ventures and strategic alliances, cartel conduct, as well as pricing and distribution strategies. She has significant experience in representing clients in ACCC investigations into alleged contraventions of Australian competition and consumer laws, including acting for immunity applicants. She also regularly assists clients with competition and consumer law compliance programs.

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Lynsey Edgar is a partner in the Sydney dispute resolution team, whose practice focuses on competition and consumer law. She is global co-lead of the Firm's Competition Litigation Taskforce. Lynsey is recognised in Legal500 (Competition and Trade, Australia, 2022), where she is described by clients as having "high commercial acumen" and providing "clear and commercial merger control advice". Client feedback to Chambers & Partners states that Lynsey is "outstanding in her ability to advise on complex matters". Lynsey is a member of the Law Council of Australia's Competition and Consumer Committee, and has spoken widely on topics including compliance with competition law and responding to regulatory investigations.

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Kristina Hewetson is an Associate in Baker McKenzie's International Property team in Sydney.

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