SYDNEY – Businesses and brands in Australia have been misleading consumers about their environmental credentials, using vague terms such as “eco-friendly” or “sustainable”, or green icons such as leaves that falsely suggest that they have been independently endorsed.

The finding that Australian firms have engaged in widespread “greenwashing” – making exaggerated or false environmental claims to appeal to consumers – appeared in a report by Australia’s consumer watchdog and came as the authorities signalled plans to crack down on the practice.

The report – by the Australian Competition and Consumer Commission (ACCC) – found that consumers are increasingly taking into account companies’ environmental practices when choosing products, but large numbers of the claims are misleading.

The watchdog examined 247 businesses and brands and found that 57 per cent of them were making claims that raised concerns about their accuracy.

The three worst offenders were the cosmetics, clothes and fashion, and the food and beverage sectors, although no specific brands were mentioned.

Common greenwashing tactics exposed by the watchdog include using vague, unscientific terms such as “green”, “kind to the planet”, “eco-friendly” and “sustainable” that may indicate that the product is environmentally beneficial even though no evidence is given.

Another tactic is to use absolute terms such as “100 per cent plastic free”, “100 per cent recyclable”, “non-polluting” or “zero emissions”, even though, in many cases, these claims are likely to be false.

Experts in Australia have called for greater action by regulators, and have urged the authorities to establish specific definitions for terms such as “carbon neutral” or “net zero”.

Other firms engage in failing to disclose vital or negative information, for instance playing up steps to improve the environment which were actually mandated by law or stating that a product is recyclable when there is no available way to have it recycled.

The watchdog also found that some firms have been misleading consumers by describing their affiliation with environmental certification schemes, which assess carbon emissions, waste management or the impact on forests or wildlife, for instance.

The watchdog found that some businesses created their own certification schemes or claimed that an entire product was certified when only specific parts were.

Firms have also been promoting products with logos or symbols – often using the colour green and nature-based imagery such as leaves and the planet – that suggest the product is certified, even though it is not.

The authorities in Australia say they plan to tackle greenwashing due to concerns that the practice undermines consumer confidence in claims about sustainability, and penalises firms which invest in green practices.

The ACCC said it will consider taking legal action against offending firms.

“Businesses using broad claims like ‘environmentally friendly’, ‘green’, or ‘sustainable’ are obliged to back up these claims through reliable scientific reports, transparent supply chain information, reputable third-party certification, or other forms of evidence,” said the ACCC’s deputy chair, Ms Catriona Lowe.

“Where we have concerns, we will be asking businesses to substantiate their claims.”

Separately, the corporate regulator, the Australian Securities and Investments Commission, last week launched Australia’s first “greenwashing” court action.

The case involves a superannuation fund, Mercer Superannuation, which offered “sustainable” investment options in which the fund would not invest in fossil fuel miners, or alcohol and gambling companies.

But the commission alleges that the fund invested in mining firms such as BHP and Glencore, as well as in beer-makers such as Budweiser and Heineken, and gaming firms such as Crown Resorts and Tabcorp.

An analysis last year by Market Forces, a non-government organisation, examined 11 superannuation investment options labelled “sustainable” or “socially responsible”, and found that eight had investments in fossil fuel companies.

The securities commission said it intends to increase enforcement against greenwashing practices, saying that this is one of its priorities for this year.

“There is increased demand for sustainability-related financial products, and with that comes the growing risk of misleading marketing and greenwashing,” the commission’s deputy chair, Ms Sarah Court, said.