More and more companies are announcing bids to reduce their harmful environmental impact, but this year will see investigations into whether these “green” promises stand up against scrutiny.


In recent years, there’s been a steady increase in the number of businesses announcing zero carbon emission goals. It comes after increased pressure on corporate Australia both internationally and domestically to reduce their environmental impact.

However, while this boom in environmental promises may seem positive on the surface, authorities are now targeting businesses that exaggerate their green credentials in a phenomena known as “greenwashing.”



What is greenwashing?


Greenwashing occurs when a company creates a misleading or inaccurate representation of its green credentials in order to increase profit or marketability.

Often, businesses will make these “green” claims without a proper basis, possibly breaching the Australian Consumer Law, which prohibits against “engaging in misleading or deceptive conduct in trade or commerce.”



This tendency to overstate positive action means consumers can’t always tell the accuracy of a company’s environmentally friendly assertions, and businesses are reducing the impact of genuine environmentally friendly manufacturing processes.


Holding us accountable


Australian businesses are facing pressure from domestic and international investors demanding more action on climate change. They’re also impacted by a greater national awareness about the impact of environmental degradation, evident as we head into the upcoming federal election where both major parties have pledged 2050 carbon net zero targets.

For some, this has caused a wave of promises and positive action in the business world, contributing to a more hopeful future. However, it has also led to recognition of how ‘greenwashing’ is creating a misleading information system.

This has encouraged the ACCC and ASIC to announce tighter monitoring on ‘greenwashing,’ putting penalties in place for those who cannot prove claims of environmental credentials and climate change measures.

For small businesses, this is proving challenging. It can be difficult to back up claims of their environmental impact when they mostly rely on third party groups to make those claims, and are far removed from their energy source. Often, they also don’t have the resources to dedicate time or energy into collating data to justify their green credentials.



As well as this, authorities are facing increasing challenges due to the variety in Australian business models. A business that doesn’t manufacture their own products will find it easier to offset carbon than a business that runs a factory.


What can businesses do?


Despite these challenges, holding companies accountable for their claims of environmental change is an important step towards reducing the effect of climate change and ensuring a future for everyone.

As such, there are many recommendations for ways to ensure that businesses can prove their green credentials when asked for them:

  • Make evidence publicly available on their website
  • Ensure there is reasonable proof for any statements, promises, or targets in relation to environmental measures
  • Be specific and narrow in claims rather than making open and vague statements with the potential for misinterpretation



Overall, this new movement is about making real change, rather than profiting off claims of environmental action. Businesses can make a big difference by promoting sustainability measures or environmentally friendly products, and by accurately reflecting their efforts to the public, so everyone can make smarter shopping choices.


To find out more about how consumers value sustainable brands, click here.k