This article was first published in B & T magazine
The Australian Competition and Consumer Commission announced its intentions in October last year under the heading, "ACCC Scrutinises 'Green' Marketing". Commissioner John Martin noted that "there has been a steadily increasing number of inquiries and complaints about 'green' marketing" and indicated that the ACCC would take action given the importance of environmental claims to the purchasing decision.
It is only a few months down the track and the ACCC has already concluded investigations into Hagemeyer Brands Australia's marketing of its Dimplex air conditioners (November 14, 2007), Energy Australia's promotion of its green electricity (December 21, 2007) and Origin Energy's promotion on switching electricity suppliers (December 21, 2007). On January 17, the ACCC released a consumer update on environmental claims. The very next day, it announced that it was prosecuting Holden over various environmental claims made about its Saab range. This is clearly a risky area, but we can learn much about the Commission's attitude and approach from the actions it has already taken.
The clue to the ACCC's approach is in its press release on the Origin Energy matter, where the Chairman stated that "consumers can easily be confused when it comes to green claims". Where there is such a lack of knowledge, consumers are apt to take all sorts of things from an ad that the advertiser simply would not have intended. That is potentially explosive. As I have emphasised in previous articles, advertisers are held responsible for not only their express claims, but any other claims the target audience could reasonably take from the ad. The recent action against Holden is a good example. The ads claim that "Every Saab is Green ... Grrrrrreen". The Federal Court will need to consider whether Holden is impliedly representing not only that there are zero net carbon emissions over the life of the vehicle, but that every Saab vehicle has improved carbon emissions compared to those models available previously. Is that what Holden meant? The Commission alleges that was implied.
The same issue arises with the use of the term "biodegradable". It has been used for ages; so, you would think it is pretty unproblematic. Not so. Daubing a product with a "biodegradability" label implies that it is necessarily good for the environment. However, "biodegradability" simply means "the decomposition of organic material by micro organisms". The process could produce harmful substances, as well as good ones. A "biodegradable" label would be misleading if it were the former. It will also be misleading if the process takes ages.
Often, advertisers push the environmental credentials of their products simply because they are less harmful than competitor products. This was Hagemeyer's problem. Hagemeyer Brands is the Australian distributor of the Dimplex brand of air conditions. Its Come Home to Cool brochure claimed these air conditioners were "environmentally friendly". The ACCC appears to have accepted that competing air conditioners were more harmful to the environment, as they used more destructive hydrofluorocarbon refrigerants. Despite that, the Commission remained concerned that Hagemeyer was in breach of the law. The gas used in the Dimplex product was nevertheless "... a potent greenhouse gas (which) will contribute to global warming if released into the atmosphere". Even if it is friendlier than its competitors, it remained unfriendly to the environment.
All advertisers must be aware of what the public is likely to understand from their advertisements, as it is that for which they will be held accountable. That is no different for environmental claims. However, there is a difference – it is now a priority of the ACCC. Not only is the ACCC targeting these claims – and, so, you will be noticed – but the ACCC is particularly concerned where an advertisement fails to provide adequate explanation. In its press release on the Origin Energy matter, the Chairman noted that "Origin's remedial actions demonstrate why it is important that companies engaging in green marketing educate their customers about the basis underlying claimed environmental benefits ...".
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.