Greenwashing’ has been a priority for both the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC) for some time now.

ASIC’s approach to ‘greenwashing’ first emerged over a year ago with the publication of Information Sheet 271 (considered previously in our post), and was expanded with the release of Report 763 (considered previously in our post).

On 14 July 2023, the ACCC released its long-awaited draft guidance titled Environmental and Sustainability Claims – Draft Guidance for Business. The aim of this was to aid businesses in avoiding ‘greenwashing’ when making environmental or sustainability claims.

Are the two approaches aligned?

In short, the ACCC’s draft guidance is fundamentally similar to the approach taken by ASIC, with the latter focusing primarily on financial services, financial products and sustainability-related investments. Both approaches:

• are founded on the well-established legal principles of misleading or deceptive conduct;

• are centred around truth, transparency and accuracy in communications;

• stress the importance of avoiding vague, ambiguous and broad terminology;

• encourage clear and easy-to-understand language;

• emphasize the importance of communications being evidence based, supported by credible sources and based on reasonable grounds;

• require all relevant and important information to be readily available;

• make specific reference to being careful when making representations about future or aspirational matters; and

• highlight the importance of direct, open and honest sustainability targets.

Are there any inconsistencies?

The differences between the two approaches are marginal, including that:

• the ACCC’s draft guidance has outlined the enforcement considerations and factors it will take into account (e.g. genuine efforts) whilst ASIC has made no such explicit reference;

• the ACCC’s draft guidance makes specific reference to setting out conditions and qualifications relevant to claims in certain instances whilst ASIC cautions against the broad use of conditions, exceptions or qualifications (outside of investment screening criteria); and

• the ACCC has provided guidance with regards to visual elements (e.g. symbols, trust marks and third-party labels and certifications) whilst ASIC has not.

ACCC and ASIC will “work together” on ‘greenwashing’

Crucially, the ACCC’s draft guidance explains how their approach will work in tandem with ASIC’s approach. Whilst it remains to be seen how this operates in practice, it appears that the ACCC will focus on consumer facing products and services, while ASIC will be primarily focused on financial products and services. However, where claims fall within the jurisdiction of both regulators, they will “work closely together to address any misconduct.”

Ben Kneebush contributed to this article