The Business Council of Australia welcomes the opportunity to respond to the Australian Competition and Consumer Commission (ACCC) Environmental and Sustainability Claims — Draft Guidance for Business.
The BCA considers the existing economy-wide legislative arrangements for addressing misrepresentation — largely embodied in Australian Consumer Law (ACL) — to be appropriate for addressing ‘greenwashing’ in Australia.
Achieving a net zero economy requires individual businesses to be proactive, rigorous and ambitious in their targets, plans and actions to decarbonise the goods and services and supply to consumers.
It is absolutely crucial that the application of ACL facilitates healthy competition between businesses in the pursuit of net zero outcomes.
Uncertainty about how to comply with ACL risks driving unnecessarily conservative market behaviour and limiting incentives to invest in decarbonised goods and services over time.
The provision of clear guidance about how businesses can comply with existing laws, will help improve outcomes for consumers, businesses and the broader community.
It is the BCA’s strong contention that the proposed guidance for business would be enhanced by the following:
- Distinguishing between the concepts of ‘system’ net zero and ‘organisation’ net zero — individual businesses’ claims need to be assessed in the context of the sector they operate in and the function their assets and operations perform in achieving a net zero economy.
- Acknowledging environmental and sustainability issues are often very complex — distinguishing between behaviour that flagrantly disregards the law and behaviour that embraces a ‘best endeavours’ approach is critical to addressing greenwashing without inadvertently discouraging businesses who are truly working towards more sustainable services and products for their customers.
- Focussing ACCC resources on claims related to products and services — there are several other Australian regulators and regulatory frameworks designed to address greenwashing at a corporate level.
- Being comprehensive in the guidance about how the regulator will assess claims — BCA members are seeking additional clarification in a number of important areas.
The stated goals of this draft guidance are to:
- “encourage accuracy by businesses who choose to make environmental and sustainability claims
- demonstrate how businesses can make true, clear, evidence-based claims that consumers can understand and trust
- decrease instances of ‘greenwashing’, which is the practice of making false or misleading environmental or sustainability claims
- assist consumers to make more informed choices if they want to make purchasing decisions based on environmental or sustainability claims
- help businesses understand and comply with their obligations under the ACL when making environmental and sustainability claims
- explain the general approach the ACCC will take in investigating whether environmental and sustainability claims contravene the ACL and potential enforcement outcomes.”
The BCA is supportive of these goals and makes the following comments in relation to the provision of guidance with a view to advancing achievement of these goals.