If you’re making environmental claims in your marketing and you haven’t reviewed them recently, you might want to do that sooner rather than later. The Australian Competition and Consumer Commission has been making it very clear that greenwashing is a consumer law issue, and they’re willing to enforce.

Over the past 18 months, the ACCC has taken enforcement action against several major brands for misleading environmental claims. The fines have been significant, and the reputational damage even more so. This isn’t a trend that’s going away.

What counts as greenwashing

Greenwashing, in the ACCC’s view, is any environmental or sustainability claim that is misleading or deceptive, or that has no reasonable basis. This covers a wide range of conduct:

Vague claims without evidence. Calling a product “eco-friendly” or “sustainable” without being able to substantiate what that means and why it’s true.

Selective disclosure. Highlighting one environmental benefit while hiding significant environmental costs. A product made from recycled materials that’s shipped by air freight from the other side of the world, for example.

False certifications. Using logos, labels, or certifications that don’t actually exist, or that the company isn’t entitled to use.

Net zero claims without a credible plan. This is an increasingly common target. If you’re claiming to be carbon neutral or on a path to net zero, you need a credible, evidence-based plan. Buying cheap offsets of questionable quality doesn’t cut it.

Aspirational statements presented as facts. There’s a difference between “we’re working toward reducing our emissions” and “we’ve reduced our emissions by 30%.” The former is an aspiration. The latter is a factual claim that needs evidence.

Recent enforcement actions

The ACCC’s greenwashing internet sweep in 2023 reviewed 247 businesses across eight sectors. They found that 57% of businesses reviewed made potentially misleading environmental claims. That’s a staggering number.

Since then, enforcement actions have followed against companies in energy, automotive, food and beverage, and consumer goods. The penalties have ranged from court-enforceable undertakings to multi-million dollar fines.

The pattern is clear: the ACCC is building expertise and precedent in this area, and the bar for environmental claims is getting higher.

What triggers an investigation

Based on the enforcement actions to date, several patterns seem to attract ACCC attention:

Claims that are prominent in marketing but not supported by evidence available to the consumer. If your sustainability claims are front and centre in your advertising but the supporting evidence is buried in a PDF on page 47 of your website, that’s a problem.

Claims involving carbon neutrality or net zero, particularly where the offset methodology is questionable.

Claims that use absolute terms like “100% sustainable” or “zero impact,” which are almost impossible to substantiate for any product.

Competitor complaints. Other businesses in your sector are watching your claims, and they have every incentive to report competitors who are making claims they can’t back up.

How to protect your business

The good news is that protecting yourself from greenwashing allegations isn’t complicated. It just requires discipline and honesty.

Only make claims you can substantiate. Before any environmental claim goes into your marketing, ask yourself: do we have evidence for this? Can we explain exactly what we mean? Would it stand up if the ACCC asked for our data?

Be specific, not vague. “Made with 70% recycled plastic” is a specific, verifiable claim. “Eco-friendly” is not. Specificity protects you.

Qualify your claims appropriately. If your product is more sustainable than alternatives in some ways but not others, say so. Honesty and nuance are your best defences.

Keep your evidence current. Environmental claims need to be based on current data. A lifecycle assessment from five years ago may no longer be valid.

Review your claims regularly. Marketing materials have a habit of persisting long after the evidence behind them has changed. Build regular reviews of environmental claims into your compliance processes.

Be careful with offsets. If your carbon neutrality claim depends on offsets, make sure those offsets are from credible, verified sources. The quality of carbon offsets varies enormously, and low-quality offsets are increasingly being scrutinised.

The opportunity in honesty

Here’s the thing that frustrates me about greenwashing: companies do it because they think consumers want to hear that everything is fine. But research consistently shows that consumers are increasingly sophisticated about environmental claims. They’re suspicious of companies that sound too good to be true, and they reward honesty.

A company that says “we’ve reduced our packaging waste by 40% and we’re working on the remaining 60%” is more credible than a company that says “we’re 100% sustainable.” The first company is telling the truth. The second one almost certainly isn’t.

In an environment where the ACCC is actively enforcing greenwashing laws, honesty isn’t just ethically right. It’s the smartest business strategy too.