ACCC greenwashing crackdown earns startup support as sustainability claims go unchecked

Australia’s competition watchdog says it will soon “sweep” company websites for false or misleading claims about environmental sustainability, as part of a broader regulatory crackdown on corporate greenwashing practices.

The Australian Competition and Consumer Commission (ACCC) on Tuesday said at least 200 websites are in its crosshairs, covering everything from energy and car companies to those offering household products like appliances, food and drink, cosmetics, and clothing.

“As consumers become increasingly interested in purchasing sustainable products, there are growing concerns that some businesses are falsely promoting their environmental or green credentials,” said ACCC deputy chair Delia Rickard.

“Misleading claims about products or services undermine consumer trust and confidence in the market.”

The ACCC said it will focus on meanings conveyed to the “ordinary consumer”, and has flagged penalties for companies found to have seriously breached consumer trust.

“The ACCC won’t hesitate to take enforcement action where we see that consumers are being misled or deceived by green claims,” Rickard said.

The move, which builds on the ACCC’s efforts to stop large corporates from greenwashing, has already received support from brands that place sustainability at the core of their business.

Pleasant State, a Queensland cleaning product startup that recently earned plaudits from Prime Minister Anthony Albanese and New Zealand Prime Minister Jacinda Ardern for its waste-reducing products, has backed the move.

“Pleasant State’s mission is to demonstrate that doing good is good business through always being transparent, honest, and only making claims we can substantiate,” co-founder Ami Bateman told SmartCompany.

“So we fully support the ACCC’s crackdown on ‘greenwashing’ and fake online reviews as such practices don’t align with our values.”

Bateman was a sustainability performance and assurance advisor for other brands before co-founding Pleasant State, says she has witnessed her “fair share of greenwashing” to date.

The ACCC’s sweep comes during “an increase in sustainability claims that would be hard for businesses to substantiate,” she adds.

Pleasant State founders Sian Murray and Ami Bateman. Source: supplied.

Determining what’s ‘green’

The push to ensure legitimate sustainable claims among businesses comes as consumers flock to brands providing environmentally-conscious solutions.

However, in the absence of nationally consistent green credentials, businesses can take considerable liberties when promoting their goods.

While countries like Germany have launched a ‘green consumption assistant’ to help online shoppers find genuinely sustainable products, Australia hosts a significant array of independent labelling schemes covering different product types.

Perhaps the most established corporate tick of approval comes from B Corp certification, which now covers companies as big as Nespresso down to eco-bedding supplier ettitude and Pleasant State itself.

Applying for B Corp certification “can be exceptionally useful for businesses as they help clearly define what it means to be sustainable”, says Bateman.

“I would encourage all businesses to define what sustainability means to them and seek out reputable and trusted frameworks/certifications that align with their sustainability definitions and goals,” she adds.

“It’s a process that provides significant value to businesses and consumers.”

Beyond the ACCC sweep, there are other large-scale regulatory threats to businesses spruiking false green credentials.

The Australian Securities and Investments Commission has announced its own greenwashing guidance, urging listed companies, superannuation funds, and investment firms to accurately reflect their green credentials.