Clarity and transparency needed to help crackdown on greenwashing

The ACCC's actions are in response to a resurgence in environmental and carbon claims brought about by the recent change of government and the renewed focus on climate action.

Greenwashing became an issue more than a decade ago during the Rudd/Gillard governments.

Their focus and legislation on climate action saw significant momentum build rapidly around greener, more sustainable and lower carbon products and practices (and a reduction in national emissions).

However, it also unfortunately led to a corresponding rise in some businesses acting unethically and making misleading environmental claims, or in some cases, acting illegally, particularly around offsets.

When the government changed in 2013, which was characterised by a dramatic shift away from climate action, the issue ended relatively abruptly. There has since been a significant lull in environmental efforts and action, and therefore claims.

The recent election, however, which was largely won based on climate commitments, has brought a renewed focus on climate action, an increase in ambition and new net zero emission targets.

This has once again led to an increase in environmental and carbon claims, some which are being bandied about recklessly at times. Terms like carbon neutral, carbon negative, climate positive and even net zero do not yet have universally accepted definitions, which makes it easy to get confused.

The science-based targets initiative released a Net Zero Standard, which is becoming the go-to definition, suggest that for a company to be considered net zero, they need to have eliminated 90 per cent of the fossil fuels from their operations and are only allowed to offset 10 per cent or less of their total carbon emissions.

Companies can become carbon neutral instantly by offsetting 100 per cent of their emissions.

So how can business act ethically, and not run the risk of falling foul of the ACCC?

Whatever claim a business makes or whatever term they use, they need to clearly explain what it means and how they have achieved it. Ideally, businesses should publish their carbon footprint report on their website, which details the emission sources included, and how much they have genuinely reduced (i.e. before offsets).

The key is transparency. As soon as a business is vague or loose with their language, consumers and the ACCC should and will become suspicious.

Allowing people to see the specific steps a business is taking to reduce their impact builds credibility and trust.

Consumers also shouldn't take claims and slogans at face value. Individuals have enormous power to influence change through their collective buying power.

Consumers should always try to choose greener products, but they also need to question how legitimately green they are. Before purchasing a product, do some research, ask the company or manufacturer about their environmental credentials, and report them to the ACCC if they can't substantiate their claims.

Certification and verification schemes can sometimes help to provide credibility and prevent greenwashing, but these can also be fraught with issues. Anyone can offer certification.

So, it's important to look a little deeper around who conducts the certification, what's involved, and how transparent it is.

The most credible certification system in Australia is the federal government's climate active certification.

It already boasts more than 400 certified businesses and was initially set up to help address the problem of greenwashing back in 2011.

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While climate active has earned its reputation around being one of the most rigorous and credible certification systems in the world, it's likely not going to be for everyone.

For some smaller companies, the rigor of certification means it's not only very time consuming, but it is also often too expensive.

Encouraging all businesses to just get started on the journey is increasingly being recognised as critical; beginning to measure and reduce their impact is key.

For a business to spend their money on tangible actions such as buying solar and batteries, electrifying appliances or replacing their lights with LEDs, is just as valid.

So while certificate can add credibility (particularly for larger business), it's important to understand that businesses don't need to be 'certified' to be considered legitimate.

Any effort by a business to genuinely reduce their carbon footprint should be celebrated.

The most important thing is that they are clear and transparent about their achievements.

Businesses that do this well will be rewarded by consumers who, more and more, are making socially responsible, sustainable and conscious decisions about where they shop and what they buy.