As Australians become increasingly aware of the effects of
climate change and the impact their choices of consumer goods
and services are having on the environment, many business are
recognising the opportunity to differentiate themselves from
their competitors on their 'green credentials',
including carbon offsets. Indeed, the use of green credentials
as a marketing tool has become a valuable asset in its own
The difficulty for environmentally conscious consumers, as
noted by the Australian Competition and Consumer Commission
(ACCC) Chairman, Graeme Samuel, is verifying
and understanding the carbon offset claims made by businesses.
To assist both consumers and businesses, the ACCC has recently
launched guidance material on carbon offsets claims.
The ACCC publication Carbon claims and the Trade
Practices Act released on 27 June 2008 (the
guide), is essentially a guide for businesses on their
obligations under the Trade Practices Act 1974
(the Act) when making carbon offset, carbon
neutral and low carbon claims that may be misleading.
The guide identifies the particular issues that should be
considered in making, and evidence required to
substantiate, any carbon offset, neutrality or
emissions claims. It addresses matters such
additionality (that is, the benefits of the carbon
reduction were 'in addition' to those that
would have happened in any event)
timing and forward crediting of offsets (specifically,
managing the risk of claiming credits that may not
double counting of offsets (e.g. where an offset is not
permanence and risk management
co-benefits (that is, the reduction of other
standards, accreditation and logos
direct vs indirect scope of emissions
footprint calculators (in particular, the assumptions
used in such calculators)
low carbon claims
The guide provides a promising first step but it is not a
standard against which carbon emission claims can be measured.
That is not the ACCC's role.
Businesses will need to ensure that any claims they make are
specific, objectively verifiable and otherwise comply with the
guide. Given the confusion over what terms like 'carbon
neutrality' mean, the ACCC also recommends that
consumers be provided with an accurate, 'full
picture' about carbon claims being made so that they
can make an informed decision.
The guide also outlines specific prohibitions against false
or misleading representations that are, for regulatory
purposes, easily identifiable. Such representations include
representing that goods or services have sponsorships,
approvals, performance characteristics and benefits that they
do not have.
Predominately, the guide outlines what the ACCC considers
not to be 'carbon offsets' and provides a
number of recommendations that business industries should
consider applying when making carbon claims. The underlying
theme of the recommendations is clarification by business on
claims made about carbon emissions. By way of example, of
particular concern to the ACCC is the private standards that
corporations apply to their goods or services, whether by logos
or other images, which gives the impression that they are
affiliated with green groups or their carbon emission claims
have been verified by an independent third party. The ACCC
recommends to alleviate potential confusion business industries
should provide access to 'further information on
the scheme identified with the logo'.
The guide is potentially of international significance as
industries seek to maximise the value of the green credentials
including in some cases through the imposition of private
product standards such as the 'food miles'
(which is a measure of how far food travels from paddock to
plate) labels that are beginning to appear in some overseas
supermarkets. The guide produced by the ACCC clarifies, at
least to Australia, that a claim on packaging and the private
standards on which they are based need to avoid being
misleading or deceptive.
The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
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