People are increasingly making choices about which products they buy and which service providers they use because of climate change. Concerned about climate change now affects most Australians, companies that promote climate-responsive practices and make emissions reduction pledges have a competitive advantage over those who don’t.
But sometimes these claims don’t live up to reality. Climate-related greenwashing, or “climate washing,” communicates a message that exaggerates or misrepresents climate references through advertising, branding, labeling or reporting.
Examples include where corporate marketing and government campaigns promising “net zero emissions by 2050” are not backed by a credible plan. Or products are promoted as ‘carbon neutral’ or ‘climate friendly’ when they are not. It also includes cases where banks and other investors claim to be financing a “cleaner future” when this is not entirely true, potentially masking climate-related financial risks.
Climate washing is a problem because the offending companies benefit from climate scare. It also allows companies that lack solid credentials to gain customers and market advantage under false pretenses. Ultimately, it hinders progress towards emission reduction targets rather than helping.
In March, the Australian Competition and Consumer Commission (ACCC) announced a repression about climate washing and green washing. This followed an ACCC report detailing claims from more than half the 247 Australian companies reviewed in an internet sweep expressed concern. The ACCC has said it will now undertake enforcement, compliance and education activities.
The Senate on Wednesday approved the creation of a research on greenwashing by companies in Australia. The study will examine the impact of greenwashing on consumers and the environment and will identify the legal and regulatory actions needed to stop it.
Read more: Greenwashing: How ads make you think brands are greener than they are – and how to avoid falling for it
The credibility gap
The need to reach net-zero emissions by mid-century is consistently reinforced by climate science. This includes, most recently, this month report by the Intergovernmental Panel on Climate Change.
One of the results is a deluge of strategic marketing with no net zero. Especially in the case of major contributors to climate change — such as fossil fuel companies, airlines and the meat industry — adopting a net-zero narrative changes the public perception that the company is part of the solution, rather than the problem.
Climate washing essentially describes a gap between what is promised and what is likely to be achieved. This “credibility gap” may be due to factors such as over-reliance on speculative technology, compensation, and modeling that is outdated or not properly verified. While there is a strong push for transparency around the world, many entities do not adequately disclose the data and assumptions behind their promises.
Complaints and lawsuits
Last week, a group called Flight Free and their lawyers approached the ACCC about Etihad Airways ads that said “flying shouldn’t cost the earth” and “net zero emissions by 2050”. The ads were prominently displayed at a football match in Melbourne last year. Flight free says the advertising is misleading.
ENVIRONMENTAL DEFENDERS OFFICE/MONKEY
The Etihad complaint follows proceedings brought by the Federal Court’s Australasian Center for Corporate Responsibility against gas company Santos. currently on the road, this complaint challenges Santos’ claims of “clean fuel” and “net zero by 2040”.
Earlier this year, business watchdog ASIC (the Australian Securities and Investment Commission) initiated proceedings against superfund Mercer for allegedly misleading investors into thinking their investments in a “sustainable” investment option exclude fossil fuels.
There is one all over the world recent increase in lawsuits over climate flushing. Multiple complaints alleging that the football association FIFA falsely advertised the World Cup in Qatar as “completely carbon neutral”.
In aviation, there is a lawsuit against KLM aimed at its ‘fly responsibly’ campaign, and there has also been a successful challenge to RyanAir’s low-carbon campaign.
Product complaints ranged from supposedly climate-neutral garbage bags to ‘climate-controlled pork’ in Denmark and ‘climate-neutral croquettes’ in Germany.
How is climate washing regulated?
Climate washing is a form of deceptive and deceptive behaviour, which is federally regulated in Australia competition law and consumer law.
Climate washing with regard to financial products and services is regulated under securities and investment law.
Both the ACCC and ASIC monitor climate washing.
Globally, concerns about climate change have led to United Nations action. Last year, a high-level expert group on the Net-Zero Emissions Commitments of non-government entities was established to address climate spills. The group has a “zero tolerance for net-zero greenwashing” mantra, and has lived up to it a report at Egypt’s November COP on climate change, which includes a “how-to” guide to credible, accountable net-zero pledges.
Read more: ‘Toxic cover-up’: 6 lessons Australia can learn from damning UN report on greenwashing
What you can do
There is every reason to support companies that take real and meaningful climate action. But as a consumer, it’s hard to check simple claims that are actually quite complex claims.
If you are suspicious of climate scrubbing, you can report this to the ACCC here. You can also follow the work of non-profit organizations researching and reporting on climate washing. For example, stay informed by following sites like ClientEarth’s The Greenwashing Files. And follow the centers of public interest taking action, such as Environmental Justice Australiathe Environmental Advocates OfficesAnd Generate equity.
When buying a product or service, it never hurts to ask questions and receive more information. If you a shareholder, take a good look at annual reports. And make the most of the voting options.
Have your say on government proposals targeting climate change and climate change. The initial consultation process The Australian government’s action on climate disclosure and reporting recently closed, but submissions on new reporting requirements will open later this year.
Ultimately, it’s a good thing that governments and businesses want to join in a smooth transition to a net-zero future. And jumping on the net-zero bandwagon is certainly a welcome step away from climate denial.
But to actually achieve net-zero goals in a way that avoids last-minute struggles and significant losses along the way, it’s important for everyone that commitments and promises are made honestly, honestly, and credibly.
Editor’s Note: In response to the misleading advertising claim, Etihad said it is “carrying out a comprehensive research, development and innovation program to decarbonise aviation, and is committed to achieving net zero emissions by 2050”.
The Australian Center for Corporate Responsibility case against Santos is before the courts.
Superfund Mercer said in a statement: “We have worked with ASIC on their investigations and take their concerns very seriously. As this matter is before the courts, it would be inappropriate for us to comment further at this time.”
