Australia

Relevant legislation or guidelines 

• Sections 18 and 29 of the Australian Consumer Law (ACL) (Schedule 2 to the Competition and Consumer Act 2010 (Cth) (CCA)).
• ACCC final guidance (published 12 December 2023): Making environmental claims
• AANA (Australian Association of National Advertisers) Environmental Claims Code.

Is there any upcoming relevant legislation or guidelines?

The Australian Competition and Consumer Commission (ACCC) has published final guidance for businesses making environmental and sustainability claims. The guidance sets out eight principles to guide businesses to ensure that their environmental and sustainability claims are not misleading or deceptive.

Although the guidance is not law, it clarifies the regulator’s views on best practice for businesses that wish to make environmental and sustainability claims about their goods or services in Australia.

In March 2024, the ACCC announced that “consumer, product safety, fair trading and competition concerns in relation to environmental claims and sustainability” are key enforcement priorities in 2024/2025.

On 12 January 2024, the Federal Government released the exposure draft of the Treasury Laws Amendment Bill: Climate-related financial disclosure (Proposed Legislation). Under the Proposed Legislation, climate-related disclosures will mirror a company’s financial disclosure obligations. The policy rationale behind this is to improve the quality and comparability of disclosures of material climate-related financial risks and opportunities within the financial reporting framework. The consultation is presently under way – the Proposed Legislation is yet to become law in Australia

Who are the responsible authorities or bodies?

• The ACCC is the competition and consumer regulator, and responsible for administering the CCA.
• The Australian Securities and Investments Commission (ASIC) is the regulator responsible for administering the Corporations Act 2001 and Australian Securities and Investments Commission Act 2001.
• Ad Standards is an independent body that administers a national system of advertising self-regulation and handles complaints about advertising and marketing standards.

What are the enforcement measures?

• Breaches of the ACL result in maximum penalties of the greatest of: (a) $510,000,000; (b) three times the value of the “reasonably attributable” benefit obtained from the conduct if determinable by the; or (c) if the court is unable to determine the value, 30% of adjusted turnover during the breach.
• Other measures include injunctions, adverse publicity orders, corrective advertising orders, community service orders and disqualification orders.
• ASIC has a range of enforcement powers including investigating suspected breaches, issuing infringement notices, seeking civil penalties, banning individual activity and prosecuting offenders.

Who can pursue infringements?

• ACCC
• ASIC
• Competitors
• Consumers

What are the general rules of thumb for green claims?

Green claims should:

• Be accurate, and not be misleaading or deceptive, or likely to mislead or deceive;
• Display any disclaimers or important limitations/qualifications in clear, plain and specific language;
• Clearly represent the attributes or environmental benefits or limitations as they relate to a particular aspect of the product/service;
• Be able to be substantiated and verifiable, and meet any applicable standards.
• Avoiding visual elements that give the wrong impression;
• Being direct and open about a business’ environmental and sustainability transition.

Do green claims need to be substantiated by evidence?

Yes, green claims should be able to be substantiated as it is a good way to show that there is a good faith basis for making the representation. A lack of evidence to substantiate the claim may mislead consumers and breach the ACL.