ACCC Releases Updated Principles on Making Green Claims

On 12 December 2023, the ACCC has released an updated guide for business on making environmental (i.e. green) claims. A key part of the guidance is the release of eight principles which, if followed, should aid businesses to comply with the consumer (and other laws) law when making environmental claims.

The principles are (2023 Principles):

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. 

The 2023 Principles and the associated guidance supersedes previous principles and guidance released by the ACCC in 2011 (2011 Principles).

Comparing the 2023 Principles to the 2011 Principles, two appear newly added:

• 4) ‘Explain any conditions or qualification on your claims’.  Whilst the 2011 Principles emphasised the problems with making unqualified claims, and recommended qualifying statements, the 2023 Principles expands by requiring sufficient explanation of the conditions and qualifications. Care needs to be taken with claims which may be true in certain circumstances, but not true in the circumstances in which consumers normally use the relevant products; and
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• 8) ‘Be direct and open about your sustainability transition’.  This principle is entirely new.  It addresses businesses claiming to have taken steps in environmental sustainability transition, when in actuality they merely plan to do so in the future or the steps are still works in progress.

Other than above, the new 2023 Principles are largely consistent with the 2011 Principles, with improved clarity and greater authority. For instance, the 2011 Principles mainly used the constructions “Claims should…” or “Claims must not…” etc.

It is important to note that both the 2023 Principles (and the obsolete 2011 Principles) are guidance only, and do not have the force of law. That is because the operative legislation in the Australian Consumer Law (ACL) itself is a broad prohibition on businesses from making false or misleading representations or engaging in misleading or deceptive conduct, and environmental claims are just a subset of claims that can be made under that law.

Having said that, as long as businesses are able to demonstrate their adherence to the 2023 Principles in their environmental claims, it would certainly be less likely that the ACCC would take enforcement action against such claims.

Further Reading

ACCC Media Release on 2023 Principles
https://www.accc.gov.au/media-release/accc-releases-eight-principles-to-guide-businesses%E2%80%99-environmental-claims

ACCC – Making Environmental Claims – A Guide for Business (December 2023)
https://www.accc.gov.au/system/files/greenwashing-guidelines.pdf

ACCC - Green marketing and the Australian Consumer Law (2011)
https://www.accc.gov.au/system/files/Green%20marketing%20and%20the%20ACL.pdf

The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only. You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.