Are you a victim of ‘greenwashing’? The term has been around since the 1990s, but is only now making its way to the forefront of consumers’ minds. In fact, the issue is currently so topical that last month the Australian Competition and Consumer Commission released a guide called ‘Green Marketing and the Trade Practices Act’.
The guide serves as a reminder to companies, marketers and lawyers that ‘green’ claims are not exempt from the requirements of the Trade Practices Act 1974 (Cth), and that the ACCC will vigorously pursue companies that breach consumer protection laws.
In the past few months, the ACCC has investigated several high-profile companies such as Origin Energy, Saab, Daikan, Sanyo air conditioners and Energy Australia for their ‘green’ claims.
Don’t let your company end up on this list.
More and more companies are advertising their products as ‘green’ and ‘environmentally safe’. There’s green energy, green insurance, and even green travel, with Qantas and Intrepid Travel now offering passengers "carbon-neutral" flights. As good consumers, we are constantly under pressure to be more environmentally friendly, so it is natural that we rely on advertisements when we visit the supermarket, the department store or the Internet to purchase various products and services.
But are we being ‘greenwashed"? The process refers to companies spending more time and money of giving the appearance of being environmentally friendly than ensuring their products are environmentally safe. This is where the law comes into play. The Trade Practices Act 1974 prohibits conduct that is misleading or deceptive, or that is likely to mislead or deceive. It is also an offence to falsely misrepresent features of a product or service.
These principles are not new, and they apply to all claims, ‘environmentally friendly’ or not. If you are claiming that your insurance or your energy is 100% green, then you should seriously consider how you can substantiate that claim, and what your audience will think you mean when you make such claims.
A research company in the US has recently undertaken a detailed analysis of "green" claims and, as a result, has identified the "Six Sins of Greenwashing". Whilst it is not clear what attitude the ACCC has to all of these types of claims, there is a strong risk that any conduct that falls into a category of one of these "sins" will be actioned by the ACCC. They give a useful guide when considering "green" claims.
The sins are as follows:
- Sin of the trade-off — These are claims that suggest a product is "green" based on a single environmental attribute (the recycled content of paper, for example) or an unreasonably narrow set of attributes without attention to other important environmental issues (such as the energy, climate, water, or forestry impacts of paper). These types of claims usually are not false, but paint a misleading picture of the product than a more complete environmental analysis would support. In the research, this was the most frequently committed "sin," made by 57% of all environmental claims examined.
- Sin of lack of proof — This occurs where there is a claim that cannot be substantiated by easily accessible supporting information, or by a reliable third-party certification. More than one quarter of products surveyed fell into this category.
- Sin of vagueness — Where the claim is so broad that its real meaning is likely to be misunderstood by the intended consumer, such as "chemical free" or "all natural." More than 10% of products surveyed fell into this category.
- Sin of irrelevance — Some products make claims that may be truthful but are unimportant and unhelpful for consumers. An example is where a manufacturer claims that the product is CFC-free. This is undoubtedly true, as ozone-depleting chlorofluorocarbons have been banned for many years, but it really says very little about the product. Another example is where something is claimed to be "phosphate free" when the product does not contain (and has never contained) phosphates.
- Sin of lesser of two evils — Similar to the sin of irrelevance, this occurs when an environmental claim is made that may be true, but distracts the consumer from the greater environmental impacts of the category as a whole, such as organic tobacco or green insecticides.
- Sin of fibbing — These are claims that are false, for example misstating ingredients or misusing certification by an independent authority that has not been granted.
If your company makes claims about being environmentally friendly or ‘green’, then avoid falling victim to the greenwashing trend. Firstly, be honest when you make your green claim. If your product contains recycled materials in the packaging only, don’t promote your product as made from 100% recycled materials. Second, keep your claim specific. In my previous example, you might advertise your product as "Packaging made from recycled materials". Thirdly, keep your language simple so the busy consumer running past their TV set or down a supermarket aisle leaves with the right impression of your product: the correct one. Avoid chemical names or abbreviations that the average busy person will not understand. And last, but not least, ensure that your claim is substantiated. Be sure that you have a reasonable and sound basis for making your claim in case a customer or, even worse, the ACCC comes knocking.
The bottom line is don’t let your advertising end up more ‘grey’ than ‘green’.
Swaab was recently named winner 'Best Law Firm in Australia (Revenue < $20m)' at the 2007 BRW-St George Client Choice Awards.
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