Today, the ACCC published eight principles to help businesses ensure that environmental marketing and advertising claims about their products or services are clear and accurate and do not mislead consumers.
The principles comprise the ACCC’s final guidance on environmental claims, which sets out their view of good practice when making environmental claims and making businesses aware of their obligations under the Australian Consumer Law.
“Our final guidance helps to demonstrate how businesses can make clear, evidence-based environmental claims that consumers can understand and trust,” ACCC Acting Chair Catriona Lowe said.
“Environmental claims are useful for consumers when they can easily understand what the environmental benefit is, and if there are any restrictions that can limit this benefit.”
Ensuring such claims are clear and accurate helps people make better purchasing decisions and incentivises businesses to compete fairly and differentiate themselves based on genuine investment and innovation.
“As we transition to a greener economy, we need businesses to drive market innovation by investing in and choosing products and services with the lowest environmental impact,” Ms Lowe said.
“For consumers to drive change, they need to be able to trust that the products and services they are buying genuinely are sustainable, and businesses making real efforts to deliver benefits should not be disadvantaged by rivals making disingenuous claims.”
The final guidance incorporates feedback from over 150 stakeholders across consumer, business and environmental organisations.
“Misleading environmental and sustainability claims continue to be an enforcement and compliance priority for the ACCC, and we have several active investigations underway,” Ms Lowe said.
“Our final guidance is intended to improve compliance by helping businesses make meaningful and truthful claims that meet their obligations under the Australian Consumer Law.”
The ACCC is aware that many businesses have genuinely changed how they operate in response to consumers’ increased environmental consciousness.
“Where a business has genuinely changed how they operate to be more sustainable, we want them to have the confidence to tell their customers about these changes. We also want them to be able to legitimately market their products or services to consumers seeking a more sustainable option.”
“Environmental claims are often technical and can be difficult for businesses to communicate clearly. By following the principles in our guidance, businesses can more confidently make meaningful claims that consumers can understand and trust.”
“It is important for businesses to consider whether they are exaggerating the environmental benefits of their product or services and whether they have a reasonable basis to make the claims, otherwise they risk breaching the Australian Consumer Law,” Ms Lowe said.
In early 2024, the ACCC will release further guidance for businesses and individuals on emission and offset claims, as well as the use of trust marks. The ACCC will also develop guidance to help consumers confidently assess and rely on environmental claims.
The eight key principles are:
(1) Make accurate and truthful claims
(2) Have evidence to back up your claims
(3) Don’t hide or omit 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
According to the new guidance, businesses may choose to use third-party certifications to provide credibility to their claims. When selecting a third-party certification scheme, the ACCC recommends taking the following steps:
• Choose a certification scheme that is independent, transparent, reputable, and robust
• Check that the certification is suitable for your needs and that it adequately reflects the characteristics of your product, service, inputs or business
• Offer consumers details of further information on the scheme or direct them to where they can access this information
At GECA, we’re so proud to run Australia’s only non-profit lifecycle ecolabel program following ISO 14024 principles for global best practice in rigour, transparency and independence. Our product and service standards even have specific criteria stating that any environmental claims made beyond the scope of our standard by the manufacturer are verifiable.
We’ve also developed our Claims Authentication service following internationally recognised ISO 14021 principles to assist organisations in moving beyond a self-declared environmental single-issue claim about their product or service.
Need help to implement the ACCC’s guidance? Contact us to learn about our training module with Marque Lawyers to educate your employees, marketing team, and management, helping to raise awareness about how to make and substantiate your claims correctly and ensure compliance with your business’s legal obligations.