[Ed. note – We’d really be grateful if you would take 5 seconds to respond to this LinkedIn poll. It doesn’t ask for your information and it isn’t a sales pitch. Thank you.]
While the US is unlikely to take an interest in greenwashing enforcement at the federal level for the next several years, other jurisdictions are charging forward. The EU, UK, Canada, US states, and Asia-Pacific continue to enforce consumer protection and greenwashing laws. A recent memo from White & Case focuses on Australia, explaining how the Australian Competition and Consumer Commission (ACCC) is doing it:
“The ACCC’s focus on enforcement commenced in 2018 with its greenwashing claims against Woolworths over its ‘eco’ products, followed by two internet sweeps in 2022 (reporting its findings in “Greenwashing by businesses in Australia“). It has since released Greenwashing Guidelines and Guidance on Making Environmental and Sustainability Claims and the Sustainability Collaborations Guidelines to provide guidance for consumers and companies regarding sustainable practices, claims, and collaborations with other businesses. Earlier this year, the ACCC reinforced environmental claims and sustainability as a priority area for investigation in its enforcement and compliance priorities”
The Australian Securities and Investment Commission (ASIC) brought three enforcement actions against financial institutions for misleading marketing of ESG investments. All three of those cases succeeded – each resulting in penalties over $10 million. Greenwashing compliance differs from region to region, as jurisdictions often take different approaches to how sustainability claims can be made. With that in mind, the memo offers several overarching best practices to help mitigate risk:
- “ensure that claims are truthful, clear and accurate
- [ensure] the claim is only made where there is sufficient evidence to substantiate the claim
- avoid using vague and general claims, such as ‘eco-friendly’, ‘green’ or ‘sustainable’
- not use unsubstantiated claims about future aspirations or projections
- align marketing with actual investment or operational practices”
Our members can learn more about how to mitigate the risks of greenwashing here.
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