ACCC releases eight principles to guide businesses’ environmental claims

ACCC publishes principles to help businesses ensure environmental claims they make are accurate and do not mislead consumers.

The ACCC has published eight principles to help businesses ensure any environmental marketing and advertising claims they make 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 the ACCC’s view of good practice when making environmental claims, as well as 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 not only helps consumers making purchasing choices, but also means the right incentives are in place for 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 more than 150 stakeholders across consumer, business and environmental organisations on the ACCC’s draft version of the guidance.

“Misleading environmental and sustainability claims continue to be an enforcement and compliance priority for the ACCC, and we have several active investigations underway,” 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 said it 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,” Lowe said.

The final guidance is available on the ACCC website at Making environmental claims: A guide for business

In early 2024, the ACCC will release further guidance for businesses and consumers on emission and offset claims, as well as the use of trust marks.

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

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