Broadly speaking, ‘greenwashing’ is the practice of using deceptive marketing or misleading claims to persuade the public that a company, product, or investment is more environmentally friendly or sustainable than it actually is.
The ACCC recently launched Federal Court proceedings against fast food chain Grill’d, alleging its ‘Tree Day Tuesday’ promotion amounted to greenwashing. In a report published by Crikey, Rod Campbell of the Australia Institute stated that greenwashing extends beyond individual marketing campaigns.
"It's good to see the ACCC chasing dodgy claims of corporate philanthropy, but Grill'd are the small fries in this game," he said.
The Institute estimates that around $1.1 billion in reported corporate philanthropy by major companies may be questionable or overstated. David Hertzberg, principal lawyer at Equity Generation Lawyers, said regulators have increased enforcement in recent years.
"Greenwashing is an enduring problem. Consumers and investors factor in environmental claims when making decisions, so when claims don't stack up, it causes real harm," he said.
Erin Turner, CEO of the Consumer Policy Research Centre, stated that vague environmental claims remain widespread and often fall outside current regulations.
"We found vague green claims on fridges and washing machines meant that 84 per cent of consumers were willing to pay 10 per cent more for the product," Turner said.
"That translates to a $1.2 billion loss to consumers on green claims that don't deliver."
Turner argued that current legislation does not adequately regulate broad claims, including eco-friendly and green claims, despite their significant influence on purchasing decisions.
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