Australia

At present, Australia does not have specific legislations or regulations that solely target greenwashing. There is, however, federal law referred to as the Australian Consumer Law (ACL) contained within Schedule 2 of the Competition and Consumer Act 2010 (Cth) which governs consumer rights and general business conduct to ensure consumers are not mislead or deceived. Additionally, the Australian Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth), contain general prohibitions against a person engaging in dishonest, misleading or deceptive conduct relating to a financial product or financial service. These prohibitions must be complied with when offering or promoting sustainability-related products.

Over recent years, the Australian Competition & Consumer Commission (ACCC) has established guidelines on Environmental Claims, which require claims made about environmental impacts to be truthful, transparent and accurate. Completing and reenforcing these guidelines, the Australian Association of National Advertisers (AANA) announced the launch of its Environmental Claims Code (Code) which became effective on 1 March 2025.

This Code was established to strengthen the advertising industry’s commitment to responsible advertising practices and its crucial role in supporting government efforts to eliminate greenwashing. Additionally, the Code aims to ensure that advertisers apply high standards when making Environmental Claims and to increase public trust and confidence. 

The Code provides that an "Environmental Claim" refers to any message or representation that gives the impression that an industry, business, product or service:

• has a neutral or positive impact on the environment;
• is less harmful for the environment than alternatives; or
• has specific environmental benefits.

The ACCC considers a business to be engaged in greenwashing where it makes a claim that represents a product, service or the business itself as better for or less harmful to the environment than it really is. Section 18 of the ACL provides, a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. This provision is frequently applied to address misleading advertising practices by businesses in Australia such that greenwashing can be a violation of the ACL. The ACL applies to all forms of marketing containing claims made on products packaging or labelling, point-of-sale materials, and in a variety of advertising materials including on social media.

Whether a business intends to mislead or not is irrelevant. When determining if a claim would be misleading or deceptive, it is critical to consider whether the overall impression created would be misleading to the ordinary and reasonable consumer. Any information or claims pertaining to environmental advertisements must be accurate, truthful and based on reasonable grounds. Effectively, businesses must ensure that the information provided, or claims made are unlikely to give consumers the wrong impression. Under the ACL, businesses must also ensure that any sustainability claims made in a Product Disclosure Statement (PDS), are truthful, accurate and not misleading.

The Australian Securities and Investments Commission (ASIC) also plays a role in addressing greenwashing misconduct to maintain market integrity. In June 2022, ASIC issued an Information Sheet (INFO 271) outlining ways to avoid greenwashing when offering or promoting sustainability-related products. To assist in improving the quality of disclosure, ASIC encourages voluntary disclosures that are in accordance with the recommendations made by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). ASIC’s role also involves supporting the Government’s implementation and enforcement of Australia’s new mandatory climate reporting regime which commenced on 1 January 2025, comprising Australia’s first climate-related financial disclosure regime.

 

Enforcement actions

Legal actors who can initiate court proceedings

The ACCC can initiate court proceedings against businesses for breaching the ACL. Private companies such as competitors and individuals can also initiate court proceedings for breaches of the ACL. Additionally, private companies and individuals may lodge a report of a breach of the ACL with the ACCC and are encouraged to identify any violations of the ACL to the ACCC.

ASIC also addresses greenwashing misconduct through surveillance and enforcement activities. In a report issued by ASIC (REP 791) in August 2024, ASIC outlined a range of measures and interventions taken in response to greenwashing misconduct between 1 April 2023 and 30 June 2024. Where greenwashing misconduct is identified, ASIC has powers to make regulatory interventions including obtaining corrective disclosure, issuing infringement notices, and commencing court proceedings.

Potential legal sanctions for inadmissible Environmental Claims

There are a range of regulatory powers that allow the ACCC to investigate and pursue potential contraventions of the ACL. These include:

• compulsory information gathering powers which allow the ACCC to obtain information and documents under section 155 of the ACL;
• substantiation notice requiring a person to provide information and/or produce documents that may be capable of substantiating or supporting an Environmental Claim;
• infringement notice with penalty amount; and
• court actions.

Penalties for contravening the ACL can be large. For example, for corporations certain breaches can see fines the greater of:

• AUD50 million;
• 3 times the value of the benefit obtained that is ‘reasonably attributable’ to the contravention; or
• 30% of the corporation’s adjusted turnover during the relevant period for the contravention.

Recent enforcement action

The Ad Standards Community Panel (Panel) recently considered whether an Australian-owned resource sector company, breached the Code by making Environmental Claims that were misleading or deceptive. The company made the following claims in its internet advertisement: "Our clean gas keeps the lights, and factories, hospitals, and shops open from Tokyo to Toowoomba." The complainant(s) argued that the company’s claim indicating their gas is "clean" (i) was false, misleading, and not substantiated, and (ii) was aimed at prospective employees who may have been misled into thinking that working for the company and in the gas industry was environmentally beneficial and posed no dangers to the environment.

The Panel considered that the line in the advertisement, "our clean gas" did in fact constitute an Environmental Claim suggesting that the gas provided by the company was clean.

The Panel highlighted that the phrase "clean gas" is broad and undefined. Additionally, most members of the community would understand "clean" in relation to an energy source to mean that the energy source does not harm or have a negative impact on the environment. The Panel determined that the company’s failure to provide further disclaimers explaining the limitations of the term "clean" resulted in the advertisement being misleading or deceptive, or likely to mislead or deceive, breaching sections 1 and 3 of the Code.

 

Potential mitigation of greenwashing risks

Environmental Claims in advertising

In December 2023, the ACCC produced a guide for businesses on making Environmental Claims. The guide outlines principles that businesses are recommended to uphold. The principles in the ACCC guide for making Environmental Claims are strengthened in the Code. The Code provides:

Section 1: Claims must be truthful and factual

• Environmental Claims must be accurate, true and factually correct. If the claim is not true or is only partially true, it may create a misleading overall impression.
• Environmental Claims must not be or likely to be misleading or deceptive to the Target Consumer. The Code provides that "Target Consumer" refers to the average and reasonable consumer of the target audience.
• If there is a third party involved, for example, in supplying products, it may be necessary to undertake reasonable steps to verify Environmental Claims or information provided by the third party, in order to make accurate and truthful claims.
• Any statements that involve comparisons with competitors must be transparent, fair, and demonstrate a true reflection of the impact of the products, services or businesses. There must be an explanation for how the comparison has been made and the comparisons can be understood by consumers easily.

Section 2: Claims must be supported by evidence

• It is important to be able to substantiate Environmental Claims. In particular, scientific evidence or research that support the Environmental Claim is considered most credible. However, in circumstances in which the scientific basis for the claim is under dispute or not conclusive, the claim should not be presented as being universally accepted.
• Advertisers must carefully consider the use of any third-party certification schemes or verification bodies to ensure they are independent, transparent, reputable and robust. It must be ensured that the certification or verification is suitable for the products or services and does not give the impression that it goes beyond what has been certified/verified.

Section 3: Clear and not vague

• Environmental Claims must be written in clear language, having regard to the Target Consumer. Moreover, scientific terminology and references should be used in a way that is easily understandable by the Target Consumer. Providing explanations of terminologies through website links or QR codes may be beneficial.
• Broad, vague or unqualified Environmental Claims must be avoided. For example, claims such as "environmentally friendly" or "eco safe" are broad and can be misleading unless it is appropriately qualified.
• When making Environmental Claims, it is critical to consider limitations or conditions that must be met in order for the claims to be true.
• Regarding emissions-related claims, it must be ensured that headline claims such as "carbon neutral" or "net-zero" are understandable to the Target Consumers. Emissions related claims must be based on a detailed emissions baseline assessment using established and recognised methodologies.
• When making ‘recyclable’ claims, advertisers must consider the accepted Government or industry definitions of "recyclable". The use of the Australasian Recycling Label must comply with Australasian Recycling Label rules.

Section 4: There must be a genuine benefit

• Advertisers must only make Environmental Claims that are about a genuine benefit to the environment.
• Businesses must not make claims that exaggerate an environmental benefit or understate an environmental harm.
• To minimise the risk of misleading consumers with exaggerated claims, businesses should:
  • clearly outline the specific environmental benefits of their product or service,
  • where applicable, quantify the specific environmental benefit being achieved,
  • avoid stating that the product, service or business has an overall positive impact on the environmental as there are usually some negative environmental effects as well, and
  • avoid making claims about the product or service that are based on broad scientific opinions that are not conclusive or may not apply to the product or service.

Section 5: Representations about the future must be made with caution

• When making Environmental Claims about future events, there must be reasonable grounds for such claims. Environmental representations about the future made without reasonable grounds can be considered reckless and perhaps even misleading.