What is ‘greenwashing’?
‘Greenwashing’ is a term used to describe false or misleading environmental claims. Greenwashing makes business appear more environmentally beneficial than they really are.
A business is greenwashing when it uses any claim that makes a product or service seem less harmful for the environment than it really is or have a greater positive environmental impact than it actually does.
In addition, greenwashing may occur when a company attempts to emphasize sustainable aspects of a product to overshadow the company’s involvement in environmentally damaging practices.
The environmental claims could apply to the company as a whole or to a specific aspect of the company’s practices.
Why is greenwashing a problem?
To meet the growing number of consumers considering sustainability in their purchasing decisions, businesses are making environmental claims about their products, services, and operations. These attributes can be a major factor in people’s decision to buy.
Unfortunately however, not all claims made buy businesses are true (or completely true) which can misleading for customers.
According to the ACCC environmental claims that are false or misleading:
- limit a consumer’s ability to make informed choices
- lead consumers to pay more for the value of an environmental benefit that doesn’t exist
- unfairly disadvantage businesses that can legitimately claim to provide more sustainable products or services
- undermine consumer trust in environmental claims and can create a disincentive for businesses to invest in more sustainable practices.
Who is the ACCC and why are they cracking down on greenwashing?
The Australian Competition and Consumer Commission (ACCC) is an independent Commonwealth statutory authority established in 1995. Its role is to administer and enforce the Competition and Consumer Act 2010 and other legislation, promoting competition, fair trading and regulating national infrastructure for the benefit of all Australians.
Essentially they are the watchdog for the proper functioning of Australian markets, and they stop conduct that is harmful to consumers.
In 2022 the ACCC conducted an internet sweep to identify misleading environmental and sustainability marketing claims. The results were released in March 2023 and alarmingly found 57% of businesses reviewed were making potentially misleading environmental claims.
“As consumers become more environmentally conscious, businesses need to be honest and transparent when making environmental or sustainability claims so consumers are not being misled. False or misleading claims can undermine consumer trust in all green claims, particularly when consumers are often paying higher prices based on these claims.”
“Similarly, businesses that are taking genuine steps to adopt sustainable practices are put at a competitive disadvantage by businesses that engage in ‘greenwashing’ without incurring the same costs.” ACCC Chair Gina Cass-Gottlieb
How can you spot greenwashing?
Figuring out what’s real and what’s just smoke and mirrors can be a bit tricky, as businesses have clever tactics to try and make us believe a company is doing its part to tackle the climate crisis, even if they’re not.
Ways to spot Greenwashing:
- Pay attention to wording: Common greenwashing words include eco, green, earth-friendly, organic (without certification), plant-based, non-toxic, and pure. These can be used on products or websites so dig a little deeper to find out whether there is any evidence to support these claims. Vague terminology without specific details is classic greenwashing.
- Watch out for green: Images of trees and natural vistas, along with brown packaging may give a product the look and feel of being sustainable, but clever branding can simply be a sales tactic to make you think company is sustainable when it isn’t.
- Hiding information. Is the company proudly showcasing their use of recycled materials but avoiding discussions about their supply chains? Are they omitting details about their manufacturing or relationships with nasty industries? Omitting or hiding information is also deceptive and considered greenwashing.
- Is that really recyclable? Beware that companies can say that their products or packaging are recyclable or biodegradable when in reality they require a special type of processing to that isn’t readily available.
- Carbon offsetting. AT the core of sustainable operations is using less, so don’t be fooled that a company that is carbon offsetting is necessarily doing the right thing. Offsetting should be reserved for unavoidable emissions, once all strategies of reduction have been put in place.
- Symbolic actions: Large corporations are notorious for highlighting a small positive action to divert or offset attention form the destructive nature of their core operations.
ACCC Principles for trustworthy environmental claims
These principles and examples are taken directly from the ACCC website, which is a great resource for guiding your ethical marketing.
Check it out here: ACCC Environmental and Sustainability Claims
1. Make accurate and truthful claims
All claims should be true and accurate. Even claims that are factually correct can sometimes still mislead consumers. A business should consider the overall impression created. This includes using visual elements. A business should only make claims that represent a genuine environmental impact. A business should not exaggerate the benefits or level of scientific acceptance of a claim.
A cosmetics manufacturer makes a claim on its packaging that “this product does not harm the environment”. The bottle is made from recycled material but the cap and external packaging are not, nor are the contents in the bottle.
“No harm” exaggerates the benefits and is likely to give a false or misleading impression about the impact of the business’s product. The business could instead claim “Reduce harm to the environment” and disclose which parts of the product are made from recycled material to avoid misleading consumers.
2. Have evidence to back up your claims
Ensure there is clear evidence to back up all claims. Evidence that is independent and scientific is the most credible. The research, evidence, or data a business is relying on should be made easily accessible to consumers. This helps consumers understand and trust the claims. If a business is making a representation about a future matter, the business should have a reasonable basis for making that representation. Otherwise, the business should not make such claims at all.
A business sells a range of chocolate products and claims that its “cocoa doesn’t contribute to deforestation”. However, the business does not know where its wholesale supplier sources its cocoa from.
The business therefore risks that the claim is not true. The business should ensure that it has a reasonable basis to assess that none of its cocoa contributes to deforestation before making this claim. Otherwise, it risks making a claim that is false or misleading and contravenes the Australian Consumer Law.
3. Don’t hide important information
A business should be transparent with information about environmental impacts. Consumers can’t make informed decisions if they’re not provided with relevant information that gives the full picture. This includes placing important information where a consumer is unlikely to notice or find it. Small print should not hide the truth. Any information or qualifications in small print should not conflict with the overall message of the claim.
An airline advertises that it is “reducing emissions”.
The airline is operating flights on some of its routes using bio-based sustainable aviation fuel. However, these flights make up less than 1% of the airline’s overall schedule and the airline is continuing to operate most of its flights using jet fuel produced from fossil fuels. The airline is also forecasting growth and expects to increase its capacity. On aggregate the airline is expecting to increase its total emissions over the next 5 years.
The claim is likely to mislead consumers. The omission of these relevant facts is likely to leave consumers with the impression that the airline is reducing its overall emissions, when this isn’t the case. Consumers are likely to be misled that the airline has a lower environmental impact than it really does.
4. Explain any conditions on claims
Theoretical environmental benefits, which are not clearly explained, are likely to mislead consumers. A business should check if there are any conditions that need to be met or steps that need to be taken for the claim to be true. If claims are only true in certain circumstances, the business should explain this to consumers clearly and prominently.
A service station and coffee retailer advertises that it’s “helping the planet” by using “recyclable take-away coffee cups”. This claim is displayed in the store and in television and social media advertisements, with a picture of a customer leaving the station holding a coffee cup with a green halo around it.
The business provides collection bins for the coffee cups in their stores. The cups must be collected through these special bins to be recycled. They cannot be recycled through publicly available or home recycling collection systems. They will contaminate other recyclable materials if disposed of through these channels. The business does not mention this in their advertising materials.
This claim is likely to mislead consumers. The business has not informed consumers that the cups can only be recycled through the in-store collection bins, risking a misleading impression that the cups can be recycled in other ways.
5. Avoid broad and unqualified claims
Broad claims can be interpreted widely and in different ways. They can more easily mislead consumers than clear, specific and proven claims. A business should ensure that it clearly qualifies claims. Any limitations should be clearly and prominently disclosed and should not contradict the overarching claim.
ACCC Examples of overly broad and vague terms
These are some commonly used broad terms which don’t help inform consumers of the environmental benefits of a product, service or business. The ACCC recommends businesses avoid using these terms.
This statement is vague and conveys little information to the consumer other than the message that the product, service or business is in some way claiming to be less damaging to the environment than others.
‘Environmentally friendly’ or ‘eco friendly’
These claims are also vague and risk misleading consumers into thinking that the product, service or business causes no harm to the environment in its production, use, delivery and disposal. Few, if any, products can truthfully make this claim. Almost all products, services or businesses have some adverse impact on the environment in their manufacture, packaging, delivery, use or disposal.
This claim is overly general and risks misleading consumers into thinking that a product, service, or business only uses resources at a rate that will not contribute to environmental harm. Almost all products have an adverse impact on the environment in some way through their use of resources.
6. Use clear and easy to understand language
Most consumers don’t have specialist scientific or industry knowledge. Businesses should use clear and easy-to-understand language and avoid technical terms.
A business labels its picnic cutlery as “reusable”. The business previously sold these same products as single use. They are made from conventional plastic and can generally only be reused for up to a week. This is because the plastic begins to degrade once it’s washed. Repeated cleaning also causes the products to become unsafe for continued use with food.
While the products may technically be able to be used more than once, consumers are most likely to interpret the word “reusable” to mean that the products can be reused many times, for an extended period. This claim is likely to mislead consumers.
The business can instead state the number of times the products can safely be reused.
7. Visual elements shouldn’t give the wrong impression
Graphics and visual elements on packaging and advertising material can influence a consumer’s impression of the environmental impact of a product or service. Examples are green-coloured packaging or logos representing a recycling process.
Businesses should avoid visual elements that can give the wrong impression about the environmental benefits of the product or service. Businesses need to consider the overall impression that is created.
The mobius loop is a globally recognised symbol for recycling. The use of this symbol can represent to consumers that a product is made of recycled materials or that the materials are recyclable, or both. Without further explanation, its use may represent to consumers that all these characteristics apply and that they apply to the whole product and packaging, where this may not be the case.
8. Be direct and open about sustainability transition
If a business can transition to more sustainable business operations and it wants to tell consumers about it, it should be direct and open. Transitioning to a more sustainable business model takes time. It is often not a straight line. Businesses should be cautious about aspirational goals and should not make claims unless there are legitimate plans in place to meet these goals.
An example is a business that can’t reduce its greenhouse gas emissions in the short term. Instead, the business is offsetting their impact on the environment. The business can make this clear to consumers.