SYDNEY - Australia’s competition regulator said on Thursday it would investigate a number of businesses for potential exaggeration of claims of environment-friendly investment and products after a review of 247 businesses found a concerning trend.

The Australian Competition and Consumer Commission (ACCC) said about 57 per cent of the businesses across eight sectors reviewed during the sweep were identified as having made “concerning claims” about their environmental credentials.

The ACCC listed vague and unidentified claims, lack of substantiating information, use of absolute claims and comparisons, and exaggerating benefits or omitting relevant information as some of the key concerns found.

The sweep, which took place between early to mid-October 2022, comes just two days after the country’s corporate regulator launched legal action against pension fund Mercer Superannuation, accusing it of misleading members about the sustainability of some of its investment options.

The court action against Mercer is the first of its kind and comes at a time when environment-friendly investment and products garner more attention, with rising interest in sustainable and ethical investment options.

Among businesses reviewed by the ACCC, cosmetic, clothing and footwear and food and drink sectors were found to have the highest proportion of concerning claims, with other sectors also making a “significant proportion” of concerning claims, it said.

“Our sweep indicates a significant proportion of businesses are making vague or unclear environmental claims. This warrants further scrutiny,” ACCC deputy chair Catriona Lowe said in a statement on Thursday.

“It appears that rather than making legitimate changes to their practices and procedures, some businesses are relying on false or misleading claims.”

The regulator will conduct further analysis of the issues and will undertake enforcement, compliance, and education activities where appropriate, it said in its detailed report. REUTERS