07 Aug 2023, By Mione Collins. Head of Marketing & Corporate Affairs

Communicating environmental claims with confidence: new ACCC draft greenwashing guidelines

It’s hard to miss the ongoing headlines about greenwashing, which have led to some businesses being fearful of communicating about their genuinely positive sustainability initiatives in case they’re perceived as greenwashing. The Australian Competition and Consumer Commission (ACCC) recently released new ‘Environmental and sustainability claims – Draft guidance for business’ to help businesses provide clear, accurate and trustworthy information to consumers about their environmental performance. In case you haven’t had time to read it yet, here TEM’s Head of Marketing & Corporate Affairs, Mione Collins, provides a snapshot of the key points from the draft guidance that are relevant to carbon offsetting communications.

What is covered in the draft guidance?

The draft guidance explains the Australian Consumer Law (ACL) obligations that businesses need to comply with when making environmental and sustainability claims. The guidance is particularly helpful in that it describes what the ACCC considers to be good practice when making these claims to help businesses provide clear, accurate and trustworthy information to consumers about the environmental performance of their business.

The ACCC says it encourages businesses to share their progress about genuine steps to improve their environmental performance with consumers and says they should feel confident to advertise the environmental benefits of their products and services, and the steps they are taking to reduce their environmental impact.

What is greenwashing?

Most of us have an understanding of what greenwashing is. In the new draft guidance, the ACCC describes it as: “‘Greenwashing’ makes businesses appear more environmentally beneficial than they really are.”

Eight principles for trustworthy environmental and sustainability communications

The draft guidance includes eight principles that the ACCC encourages businesses to apply when making environmental claims to help them comply with their obligations under the ACL and allow consumers to make informed decisions. These principles are:

Parts of guidance directly relevant to carbon offsetting communications

Communicating company environmental goals

The draft guidance says if companies make a claim about something that will happen in the future (for example, reducing their greenhouse gas emissions or achieving ‘net-zero’ targets), they should have reasonable grounds for making the claim. Otherwise, the claim will be taken to be misleading under the ACL.

The ACCC states that companies should provide consumers with regular updates about how you are performing against your goals, including disclosing if you are not on track to achieve them and what steps you are taking to address any setbacks so you can meet your goals.

Principle 8: Be direct and open about your sustainability transition

The ACCC says that businesses should make it clear which steps in their sustainability transition have been completed, and which are still in progress, and provide regular updates on their progress.

Carbon emissions-related communication

The ACCC says businesses should be careful when communicating with consumers about the greenhouse emissions associated with their products, services or business and their overall impact on climate change.

For emissions-related communications, the ACCC says it is good practice to:

  • Undertake a thorough emissions baseline assessment, using established Australian or internationally recognised methodologies.
  • Clearly and transparently communicate the actions you have taken that underpin claims. For example, specifying which parts are related to emissions reductions activities, and which parts purchased offsets.
  • Explain how you have accounted for your scope 2 emissions
  • Provide information about the types of projects that offsets have been generated from and ensure you:
    • have verified (including verifying that the emissions abatement attributable to the offset project has not already been claimed by the project owner) and that offsets representing the same emissions benefit have not been issued under multiple different registries
    • provide up-to-date information about the registry on which they are listed with details of the offsets relinquished or cancelled each year − where practicable, make this information readily accessible to consumers.
  • Account for all types of greenhouse gas emissions.
  • Ensure that consumers can understand from the information provided which emissions have been accounted for and avoid using headline claims that create a misleading impression, for example disproportionately emphasising a claim in relation to a product, service or segment of your operations if this only represents a small proportion of your overall emissions profile.

How TEM can help

Connecting our customers to high-integrity, high-quality carbon offsetting projects that they can confidently communicate about as part of their decarbonisation journey is at the heart of what we do at TEM. This includes having fully-verified carbon offsetting projects in line with ACCC guidelines. In addition to adhering to international standards, TEM carries out our own rigorous due diligence process for every project we undertake and invest in, including verification processes, to ensure its quality, integrity and measurable carbon abatement impact.

TEM works with our partners to ensure they have the information they need to appropriately and confidently communicate about their carbon offsetting and its impact with their customers and key stakeholders.

If you’d like to discuss this further, please reach out to our team here.

Did you know our new TEM Online carbon offsetting platform allows businesses to offset smaller volumes of carbon (less than 5000 tonnes) via choosing from a mix of high-quality, independently verified Australian and international offsets?

Find out more

You can read the full ACCC guidelines here: Environmental and sustainability claims – Draft guidance for business | ACCC

Important information

This information has been prepared by Tasman Environmental Markets Australia Pty Ltd (TEM), a corporate authorised representative (ABN 97 659 245 011, CAR 001297708) of TEM Financial Services Pty Limited (ABN 58 142 268 479, AFSL 430036). This material is for general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation, or needs. While we believe that the material is correct, no warranty of accuracy, reliability, or completeness is given, except for liability under statute which can’t be excluded. Before making an investment decision, you should first consider if the information is appropriate for your circumstances and seek professional financial advice. Please note past performance is not a guarantee of future performance.