The Australian Competition and Consumer Commission (ACCC) is cracking down on the practice of greenwashing, where companies falsely claim their products and services are eco-friendly, writes Gavin Dennett.
With sustainability becoming a major selling point for businesses to market to consumers how they are adopting practices that reduce their carbon footprint, the ACCC is getting tough on those exploiting the goodwill of sustainability and ethics to deceive the public.
Back in June 2022 at the Australian Financial Review ESG Summit in Sydney, ACCC deputy chair Delia Rickard said the competition watchdog will proactively pursue companies making embellished claims about their green credentials.
“When companies are out there saying, ‘We’re going to net zero, we’re reducing our carbon footprint,’ we will be looking at those claims and making sure they are doing what they say they’re doing,” said Rickard.
“As we’re looking at greenwashing in terms of claims about products and services, we’re also looking at it in terms of corporate claims.”
The ACCC will be targeting greenwashing in identified industries where the practice is rife, without necessarily waiting to act on complaints.
Rickard said blatant overstating or falsifying sustainability credentials – including net-zero targets or selling or claiming sham carbon offsets – damages consumer confidence and distorts competition.
“We’re really going to proactively say, ‘What are the problem sectors?’ and go looking for the best cases to bring,” she said.
“Where we see the greatest harm, the greatest detriment, we will be looking at going to court.”
In 2021, in a world-first greenwashing case, the Australasian Centre for Corporate Responsibility took legal action against energy company Santos for its allegedly false clean energy and net-zero emissions claims.
Rickard says the ACCC encourages consumer legal action against companies that mislead the public.
“There’s always been private actions under Australian Consumer Law, and we expect there always will be,” she said. “We welcome them.”
Green Building Council Australia CEO Davina Rooney says the ACCC is sending a powerful message to the market that companies can no longer overhype their sustainability credentials, including buildings claiming Green Star “equivalency”.
A Green Star rating provides independent verification that a building or community project is sustainable, and vague statements of equivalency erode the concept’s credibility.
“In the early days, when Green Star’s scope was narrower, it made sense that some bespoke buildings would look for proxies simply because there wasn’t a rating available to achieve,” says Rooney.
“Not so now. We’ve now certified everything from museums to metro stations, concert halls to communities, and single homes to swimming pools.
“We have solid evidence that sustainability ratings can be deployed at scale, with more than 3000 Green Star certifications and national recognition in frameworks and policies.
“Green Star certification is a quality process accredited to ISO9001. This accreditation holds us to account and ensures ratings are auditable and replicable.
“In contrast, self-assessments benchmark a proposed development against Green Star credits without undertaking rigorous and independent assessment. These self-assessments cannot be used to communicate achieved green credentials as they are not verified.
“We have built Green Star’s reputation as a trusted trademark and misusing it breaches that trust.
“The Australian Government’s Sustainable Procurement Guide notes ‘projects that claim to meet the requirements of Green Star but are not certified are potentially in breach of trademark rules and may be accused of greenwashing’.”