UPDATED: Appliance and CE businesses including the many that used the recent IFA trade show in Berlin to spruik their environmental credentials, have been sent a clear message by the Australian Competition & Consumer Commission.
The message is simple ‘The time has come for them to substantiate any environmental or sustainability claims’ claims the ACCC who are also targeting retailers, who make environmental claims about the products they are selling.
At IFA brand after brand opened their press briefings up spruiking their environmental claims, with brands such as Electrolux, Samsung, LG Electronics, Panasonic, Miele, Bosch, and Siemens all claiming that they were spending millions on a switch to sustainable production.
Recently two global retailers H&M and Decathlon who operate in Australia were forced to remove or amend misleading sustainability claims made by them in their advertising, marketing, and instore displays.
Today the ACCC made a judgement call claiming that suppliers using environmental issues to pitch their products to consumers need to be ready to substantiate any environmental or sustainability claims when marketing their goods and services, according to ACCC Deputy Chair Delia Rickard.
The Australian watchdog believes that some businesses are already misleading consumers with questionable environmental claims.
As a result, the ACCC will soon be commencing an internet sweep of various environmental claims made by Australian businesses.
They pointed out that a similar review undertaken by ICPEN, the International Consumer Protection Enforcement Network in 2020, found that 40% of environmental claims were potentially misleading and required further investigation.
“Broad terms like ‘environmentally friendly,’ ‘green,’ or ‘sustainable’ have limited value and may mislead consumers, as they rarely provide enough information about what that exactly means in terms of the product or service consumers are considering purchasing.”
Miele is one such Company that used a major global appliance and technology conference, IFA to spruik their enviromental credentials, along with both Electrolux and Bosch. There is no evidence that these Companies are being investigated by the ACCC or that these Companies have in anyway mislead consumers about their enviromental credentials.
“It is important that businesses can back up the claims they are making, whether through reliable scientific reports, transparent supply chain information, reputable third-party certification, or other forms of evidence. Where we have concerns, we will be asking businesses to substantiate their claims,” Ms Rickard said.
“The ACCC won’t hesitate to take enforcement action where we see that consumers are being misled or deceived by green claims.”
Ms Rickard said making sustainability work for business and consumers requires a multi-pronged approach.
“Through the consumer law, the ACCC plays a part in this by ensuring that businesses tell the truth, but there will also be roles for standards bodies, certification schemes, industry and governments via policy reform,” Ms Rickard said.
“The ACCC is actively monitoring green claims in the market and will be considering what steps can be taken to improve their integrity. This will include engaging with industry and producing guidance for businesses.”
“In looking at claims we are concerned about what the ordinary consumer will understand the claim to mean,” Ms Rickard said.
Ms Rickard said improving the veracity of environmental claims protects consumers and ensures competitive conduct in the market.
“Many businesses go to extraordinary lengths to make their processes, products, and services more sustainable. This innovation and investment should be protected from unscrupulous behaviour of other businesses making green claims without incurring the same costs. This can have a chilling effect on investment in this space, as businesses are not able to realise the full benefits of making environmental improvements,” Ms Rickard said.
Ms Rickard acknowledged those businesses transitioning to more sustainable practices, recognising their right to promote the steps they are taking as part of that journey.
“A business’s sustainability transition doesn’t happen overnight – it’s a long process up and down the supply chain,” Ms Rickard said.
“While businesses may look to use short and snappy slogans and claims, rather than lengthy explanations of measures underway, it is important to convey accurate information to consumers. Businesses in these positions need to be careful to not overstate the status of their transition through the claims they make.”
Ms Rickard urged businesses to step into the shoes of a consumer before making environmental claims about a product, adding the ACCC is working with other regulators to take a coordinated approach to addressing a range of issues relating to sustainability.
“Consumers generally need to take at face value that claims made are truthful, and accurate,” Ms Rickard said.
