The ACCC has published a guide for businesses on making claims about the environmental impact of their business, products or services to assist them in complying with the Australian Consumer Law (ACL).
Businesses have obligations under the Australian Consumer Law (ACL) (being Schedule 2 of the
Competition and Consumer Act 2010 (Cth)) not to make false or misleading representations or engage
in misleading or deceptive conduct. The obligations are mirrored by the ASIC Act provisions on financial services. These obligations apply to making environmental claims.
The ACCC Guidelines set out eight principles for trustworthy environmental claims:
Principle 1: Make accurate and truthful claims
Principle 2: Have evidence to back up your claims
Principle 3: Do not hide or omit important information
Principle 4: Explain any conditions or qualifications on your claims
Principle 5: Avoid broad and unqualified claims
Principle 6: Use clear and easy-to-understand language
Principle 7: Visual elements should not give the wrong impression
Principle 8: Be direct and open about your sustainability transition
In determining any enforcement action to take the ACCC says it will consider what is a proportionate response to the conduct and the resulting or potential harm.
The ACCC will consider whether genuine efforts and appropriate steps were taken by the business to verify the accuracy of any information that they relied on.
The ACCC is more likely to take enforcement action in respect of representations about future matters regarding environmental claims where a business did not have reasonable grounds for making the representation, does not have an intention or plan to implement initiatives, or knew or was reckless about whether the claim was untrue or incorrect.
ACCC’s guide complements ASIC’s guidance on how to avoid greenwashing (INFO 271) in relation to financial services regulated by the ASIC Act.
The ACCC and ASIC work closely together on the detection and investigation of misleading environment claims, including corporate sustainability claims and claims in connection with financial products and services.
The ACCC will focus on consumer facing products and services, whereas ASIC is primarily responsible for financial products and financial services.
If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.
Author: David Jacobson
Principal, Bright Corporate Law
Email:
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
