Environmental claims: Avoiding greenwashing on your goods and services

Friday 10th July 2020
Article written by: Anna Bargh

Increasingly, consumers are looking for ways to reduce their environmental impact on the planet, whether by riding their bicycle to work or giving the plastic wrap a miss when packing school lunches. As a result, many businesses are researching, developing, and promoting goods and services that have less of an environmental impact. However, how traders communicate these environmental benefits to consumers, without misleading consumers, can be tricky.

Environmental claims may cover several different aspects of promotion, including the environmental impact of the production of goods/services, the content and composition of the goods, and the production processes and/or distribution of the goods/services. 

The Commerce Commission has recently issued guidelines which set out the obligations of traders when making environmental claims in their marketing, and how to avoid breaches of the Fair Trading Act 1986.

Guiding principles when making environmental claims include, to:

  • be truthful and accurate;
  • be specific;
  • use plain language;
  • not exaggerate;
  • take care when relying on tests or surveys; and
  • consider the overall impression.

An example of an environmental claim that has breached the Fair Trading Act is that of a plastic bag manufacturer who claimed that its plastic rubbish bags were “oxo-biodegradable”, without any qualification. However, as the products would not break down in the timeframe that an average consumer expects, or swiftly break down in landfill, the claims were liable to mislead the public.    

Traders need to take care when making environmental claims about their goods and services when advertising. Seek advice in advance from an expert if you are unsure whether the claims you plan to make will be misleading or deceptive to consumers. Seeking advice at an early stage could save costs and time later on if traders inadvertently breach the Fair Trading Act.

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