Australian companies making carbon-neutral, net-zero and other emissions claims have been warned to ensure their marketing can withstand scrutiny as the competition regulator steps up its campaign against greenwashing.
The Australian Competition and Consumer Commission has released new guidance telling businesses to use credible, science-based accounting standards and clearly explain how claimed emissions reductions have been achieved.
A major focus is the use of carbon credits.
Companies relying on purchased offsets are being encouraged to distinguish those credits from actual reductions achieved within their own operations.
The regulator says consumers should be able to understand whether a business has genuinely cut its emissions or is primarily compensating for them by purchasing credits elsewhere.
Evidence must support claims
Businesses have also been warned against broad claims that could create a stronger environmental impression than the available evidence supports.
Statements about future emissions reductions must have reasonable grounds, including credible plans, finance and implementation pathways.
The ACCC says false or misleading environmental claims can breach Australian Consumer Law.
The guidance comes as emissions and sustainability claims increasingly feature in advertising across industries including energy, aviation, food, finance, retail and resources.
Greenwashing has become a significant regulatory issue because consumers and investors are increasingly making purchasing decisions based on environmental performance.
Companies making genuine investments in lower-emissions technology can also be disadvantaged if competitors are allowed to make similar claims without incurring the same costs.
The latest guidance signals that environmental marketing is moving from a largely reputational issue towards a more conventional consumer-law risk, with businesses expected to provide evidence capable of supporting the claims they place in front of customers.
