Recent Developments in Law Regarding ‘Greenwashing’

What is greenwashing?

As the world continues to learn about the dangers and risks of global warming, society has demanded more action against this crisis. Governments are encouraging against the implementation of certain non-eco-friendly practices or methodologies, with certain banning orders even being imposed. However, many businesses have arguably refused to adapt to these changes and have unfortunately adopted ‘greenwashing’.  Greenwashing refers to a business’ false claim or representation on their sustainable and eco-friendly products for profit. The Australian Competition and Consumer Commission (ACCC) found that more than half of businesses who sell sustainable products are dishonest or vague.

Why is it an issue?

Greenwashing is an issue because it misleads consumers to buy products that are not eco-friendly which is in fact a breach of s 18 of the Australian Consumer Law. Furthermore, greenwashing encourages businesses to rely on false claims of eco-friendliness, rather than taking the necessary steps to be environmentally friendly. Also, if businesses continue to do this, then there is no chance that we will be able to revert or undo the effects of climate change on our Earth.

What has the law done to restrain ‘greenwashing’?

Now, the ACCC emphasized that businesses need to show substantiated proof such as reports, transparent supply chain, third-party certification or other forms of evidence to demonstrate that their claims are true. Additionally, ACCC will continue to conduct investigations on businesses who claim to be environmental and sustainable based on the ‘2022-23 Compliance and Enforcement Priorities’. Under s 155 of the Consumer and Competition Act, ACCC has the right to collect information, documents and evidence from businesses that may indicate a breach of the Act, together with their powers to request information from businesses during their investigations.