Greens establish Senate inquiry into greenwashing

The Senate has agreed to establish a landmark inquiry into greenwashing by Australian corporations. The inquiry will investigate the impacts of greenwashing on both consumers and the environment, and develop the legal and regulatory apparatus to stop it.

Overseen by Senator Sarah Hanson-Young, Chair of the Environment and Communications References Committee and the Greens’ Senator for South Australia, the new inquiry builds on a growing chorus of anti-greenwashing sentiment.

In September last year, the ACCC announced a crackdown on greenwashing, and in March it released an initial report, ‘Greenwashing by businesses in Australia’, which detailed the findings of its major greenwashing internet sweep.

Of the 247 businesses reviewed, 57% were identified as having made concerning claims about their environmental credentials, with the cosmetics, clothing and footwear and food and drink sectors the major offenders. In response, the ACCC announced it would begin investigating a number of businesses included in the sweep.

“With recent ACCC figures showing over half of brands making false green claims to make themselves sound ‘greener’, corporate greenwashing is out of control, and it is the environment and consumers that are paying the price,” said Hanson-Young.

“Australians are more concerned about our environment than ever before, and they want to do the right thing by the planet when choosing products and services. They should be able to have confidence that when brands claim to be green it must be true.”

Greenwashing is not a uniquely Australian problem: in February, the 2023 Corporate Climate Responsibility Monitor found that 24 of the world’s richest corporations were concealing climate inaction by greenwashing. Those 24 companies contributed to 4% of global emissions, while benefiting from a combined revenue of over $4.5 trillion.

Based on that report’s findings, the group that commissioned the report, Carbon Market Watch (CMW) proposed a set of recommendations for kerbing greenwashing, including banning the use of a raft of terms, including “carbon neutral”, “CO2 neutral”, “CO2 compensated”, “Climate positive” and “net zero”, without providing supporting evidence.

The impact of greenwashing goes beyond misleading the consumer: false claims of ‘green’ status mean companies receive a public (and political) mandate to continue polluting business-as-usual.

“Whether it’s the clothing on our backs, or the food and drink we consume, everyday Australians are confronted with false environmental claims everywhere,” said Hanson Young. “It should be illegal to greenwash. We need laws that protect consumers from greenwashing and that hold companies to account.

“This inquiry is the first step in reducing greenwashing, protecting the environment and helping everyday Australians make better consumer choices.”

The model for such laws could be provided by France, which recently passed legislation to explicitly ban greenwashing in advertising, in response to UN guidelines released last year.

ASIC provides a free online information sheet that aims to help companies avoid involuntarily greenwashing when promoting their products.