The ACCC has released its formal guidelines for companies that make claims to be "green", after a super fund with a significant footprint in Wollongong was the first company to be prosecuted by ASIC for alleged "greenwashing".
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As consumers look for environmentally friendly products, companies have sought to tout their green credentials and these claims are now coming under significant scrutiny.
This has been put to the highest test by ASIC when it launched a Federal Court case against super fund manager Mercer, which employs hundreds of workers in Wollongong.
ASIC alleges that Mercer made misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
It's not just financial firms that are on notice.
In August, cement maker Boral walked back its emissions reduction target for 2025 from 18 per cent to 12-14 per cent as it struggled to meet its goals.
The carbon intensive manufacturer is investing significantly in its Berrima cement works to increase alternative fuels instead of coal, and cut CO2 emissions.
The company is also in the process of expanding its quarry footprint at Dunmore, where it operates a quarry, and is proposing to offset the loss of a rare shrub by regrowing the species at an expanded nearby habitat corridor.
The ACCC cautions that any environmental claims must be true, accurate, easy to understand and appropriately qualified.
"Businesses have obligations under the Australian Consumer Law (ACL) not to make false or misleading representations or engage in misleading or deceptive conduct. These obligations should be considered whenever you are making environmental claims," the guidelines state.
In a speech to a legal conference in August, ACCC deputy chair Catriona Lowe said the regulator was taking a serious approach to claims such as "environmentally friendly, "sustainable production" and "compostable" in consumer products.
"Whilst some might regard such terms as 'mere puffery', they do carry meaning for consumers," Ms Lowe said.
"The misuse of these terms could reasonably mislead consumers and cause harm to those businesses that are doing the right thing when it comes to sustainability."
The ACCC found that concerning claims were most likely to be found in the cosmetics, clothing and footwear and food and drink industries.
"These three industries were well above the average for concerning claims," Ms Lowe said.
"In particular, for businesses reviewed in the cosmetics industry, 73 per cent made concerning claims."
In the published guidelines, the ACCC also warns businesses from making future claims about their environmental performance, such as achieving Net Zero, unless the business has "clear and actionable plans" that spell out how the business will meet its targets.
The largest polluter in the Illawarra, and one of the largest in NSW, BlueScope has a 2050 net zero goal, however achieving this relies on a new method of steelmaking in Port Kembla, something that the company itself is not yet sure of.
BlueScope recently committed to the $1.15bn reline of the No. 6 blast furnace using traditional, coal based steel making technologies, and CEO Mark Vassella said the "key enablers" for zero or low carbon steel were not yet in place in Australia.
2024 is shaping up to be a critical year for industrial emissions, with the safeguard mechanism now in full force. Despite securing a carve out from some of the scheme's requirements, BlueScope will be required to reduce its carbon intensity.
The government is also expected to introduce legislation to establish the carbon border adjustment mechanism in 2024, a green tariff which would protect Australian manufacturers from being undercut by dirtier imports.
A new vehicle emissions policy is also on the cards, which would require car manufacturers to bring new vehicles sold in Australia in line with stricter fuel standards.
Amid these changes, any company hoping to spruik its green credentials without following through has been warned by the consumer watchdog.
