Greenwashing

As more and more companies seek to promote the environmental credentials of their products, we take a look at an alarming new corporate trend, known as `greenwashing’. Now that the corporate world has woken up to the fact that going green is good for business, it’s no surprise that the rush is on for brands to establish themselves as the greenest choice. However while many companies are taking legitimate steps to reduce their impact on the environment, others are making claims that don’t hold up to scrutiny. Known as ‘greenwashing’, this practice has drawn the attention of the Australian Competition and Consumer Commission (ACCC).

In November 2007, the ACCC launched a crackdown on greenwashing with its guidelines ‘Green marketing and the Trade Practices Act’. Through the Act, companies can be fined up to $1.2 million for misleading and deceptive conduct, and that includes greenwashing. Commercial law firm Mallesons Stephen Jaques describes the ACCC’s five main areas of concern for Australian companies as:

• Effectiveness of the ‘offset’

  The lack of accepted standards relating to carbon credits means that consumers may be misled as to the effectiveness of particular offsets at yielding reductions in carbon emissions.

• Accuracy of the carbon footprint calculation.

  The process of auditing carbon emissions is unregulated, so there are no clear standards as to how a carbon footprint is to be measured. As a result, a product or a service claiming to be carbon neutral may only be ‘green’ to the extent of a potentially inaccurate carbon calculation.

• False claims of carbon neutrality

  Companies may make claims as to carbon neutrality that are simply false, and clearly in breach of the Act.

• Claims as to future carbon neutrality

  Claims as to future carbon neutrality are also potentially misleading where there are insufficient disclaimers as to the expected timeframes of the offset process.

• Claims of ‘low carbon’
  
  Where the proportion of carbon neutrality is not specified, consumers could be misled as to the extent to which carbon emissions associated with a product or service have been offset.¹

Of course, any business that is legitimately reducing its carbon footprint should promote this to consumers – not only is it good for business but it helps consumers make smarter choices about how their spending affects the environment, and can even inspire others to do the same. However, before making any claims, the ACCC recommends that a claim should:

• be honest and truthful
• detail the specific part of the product or process it is referring to
• use language which the average member of the public can understand
• explain the significance of the benefit
• be able to be substantiated.²
• The guidelines, which outline more ways to ensure your marketing is accurate, can be downloaded from www.accc.gov.au

Notes
¹ ‘Too green to be true? The ACCC’s investigation in to carbon neutral claims’, Mallesons Stephen Jaques, www.mallesons.com, 5 February 2008.
² 'Green marketing and the Trade Practices Act’, Australian Competition & Consumer Commission, Commonwealth of Australia, 2008.

This article was sourced from the Carbon Planet newsletter “Be the Change”.