AUSTRALIA | Australian businesses making greenhouse gas emissions claims should use credible, science-based accounting standards, be transparent about using purchased credits, and consider what average consumers would understand their claims to mean.
These recommendations are contained in new ACCC guidance to assist businesses in making accurate and credible emissions claims, titled Making emissions claims to consumers: a guide for business.
Businesses that want to promote their efforts to address climate change are encouraged to use the guidance to understand potentially problematic behaviour and risks in failing to consider the consumer perspective when advertising emissions data.
False or misleading environmental claims risk breaching the Australian Consumer Law.
ACCC Deputy Chair Mick Keogh said consumers should be able to trust businesses' emissions-related claims.
“Greenwashing not only limits the ability of consumers to make informed purchasing decisions, but it also disadvantages businesses that have invested in the development of products or services that are genuinely more environmentally sustainable,” said Keogh.
“We recognise that greenhouse gas emissions accounting is complex and increasingly regulated. Our guidance is particularly aimed at helping businesses to understand their consumer law obligations when making voluntary marketing claims to consumers,” Mr Keogh said.
The ACCC strongly encourages businesses to review their consumer-facing emissions claims in light of this guidance. If any existing claims raise concerns, businesses should update their messaging, gather stronger evidence, or reconsider using them.
The guidance emphasises the need for transparency so consumers understand what emissions changes are occurring and can distinguish direct emissions reductions from credits bought from projects elsewhere.
The ACCC also urges businesses to:
- Ensure that emissions claims are based on complete, reputable and clear accounting.
- Avoid highly selective, broad or non-specific claims.
- Avoid “double counting” changes to emissions.
- Be clear in any marketing claims about individual business efforts, broader changes available to all, and legal obligations; and
- Only make claims about the future where they have reasonable grounds to do so.
The guidance recognises carbon credits and other certificates as a complement to direct emissions reductions. However, if marketing gives the impression that two activities are equivalent, neutralise, or cancel each other out, businesses must have a reasonable basis for these claims.
Consumer and fair-trading concerns in relation to environmental claims and sustainability, with a focus on greenwashing, are a current ACCC compliance and enforcement priority.
Since making greenwashing a compliance and enforcement priority in 2023 and releasing its first set of Environmental Claims Guidance, the ACCC has observed significant changes in some large companies' sustainability claims across sectors such as aviation, energy, logistics and telecommunications.
The ACCC has observed some companies moving away from vague, widely advertised carbon-neutral claims, distant future targets, and limited transparency about their reliance on credits, and toward greater transparency with customers about their actual, real-world environmental impacts.
This includes making clear that certain activities are not sustainable and that purchasing credits is not the most effective way for consumers to reduce their emissions.
The ACCC will continue to monitor this positive trend, which supports informed consumer decision-making, and will consider targeted enforcement action for ongoing problematic conduct where it is appropriate.
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