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‘State-sponsored greenwashing’ undermining ACCC enforcement

23 April 2024
state sponsored greenwashing undermining accc enforcement

Days after the ACCC announced it would launch its first greenwashing court case, a Senate inquiry heard that the government is incentivising greenwashing.

The ACCC has begun proceedings in the Federal Court against Clorox Australia, claiming the company had made misled consumers on the sustainability of certain consumer products.

In a statement released on Friday, the ACCC alleged Clorox had falsely claimed its GLAD Kitchen Tidy Bags and Garbage Bags were made of 50 per cent recycled plastic waste collected from the ocean or sea.

In reality, these “ocean plastics” were collected from Indonesian communities up to 50 kilometres from the shoreline, according to the ACCC.


“We are concerned that, by its alleged conduct, Clorox deprived consumers of the opportunity to make informed purchasing decisions and may have put other businesses making genuine environmental claims at an unfair disadvantage,” said ACCC chair Gina Cass-Gottlieb.

The ACCC alleges that the claims were made contrary to the Australian Consumer Law and that Clorox had made false or misleading representations concerning the composition and environmental benefits of the products.

Reportedly, both products were withdrawn from supply to retailers in July 2023.

Clorox’s explicitly false statements were only part of the overall sustainable, environmentally friendly impression given by the products.

“We allege that the headline 'ocean plastic' statements and wave imagery on the GLAD bag packaging, and the use of blue coloured bags, created the impression that these GLAD bags were made from plastic waste collected from the ocean or sea, when this was not the case,” said Cass-Gottlieb.

“[Clorox’s] conduct took advantage of consumers’ concerns about environmental pollution, particularly plastic waste in the oceans,” said the ACCC, adding the company had “undermined competition.”

The ACCC also alleged Clorox’s false representations undermined competition.

“[Clorox] sought to promote its products as being more environmentally beneficial than those of its competitors. It also sought to promote its products as having a particular environmental benefit, making its products appear more attractive than alternative offerings.”

This is the furthest the watchdog has taken a greenwashing case since it announced environmental and sustainability claims as enforcement priorities two years ago.

Separately, in November 2023, the ACCC accepted a court-enforceable undertaking from yoghurt manufacturer MOO Premium Foods for similar false “ocean plastic” claims.

In that case, the company had collected plastic resin from coastal areas around Malaysia, contrary to claims it had used “100 per cent ocean plastic.”

At the time, Cass-Gottlieb said the ACCC has “a number of in-depth greenwashing investigations including in the energy and consumer products sectors.”

One month later, the ACCC released guidance on the obligations of businesses under the consumer law when making environmental and sustainability claims.

Recently, the investment watchdog ASIC secured a victory in a greenwashing case before the Federal Court against global investment giant Vanguard.

By its own admission, the company had misled investors on a number of occasions regarding the environmental performance of its bond issuers within Vanguard’s billion-dollar ethical bond fund.

On Monday, a Senate inquiry into greenwashing heard evidence that the ACCC and ASIC’s enforcement efforts are being undermined by the government’s climate action scheme.

“You can’t address greenwashing by the private sector when the government’s climate policies are facilitating some of that behaviour,” said Australia Institute climate and energy program director, Polly Hemming.

“We’ve got a government that is still subsidising fossil fuels, yet businesses are expected to be making emissions reduction plans.”

Hemming claimed the government’s Climate Active program – which certifies ‘carbon neutral entities’ – gives false cover to some of the country’s worst emitters.

Emitting entities are incentivised to offset emissions by purchasing carbon offsets, changing their operations, or investing in certain technologies.

“It’s cheaper to greenwash in Australia, it’s cheaper to buy carbon offsets, it’s cheaper to pay a certification fee to Climate Active and buy offsets from a wind farm than to implement the technology,” said Hemming.

“This is what I mean by state-sponsored greenwashing.”


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