CANBERRA – Australia’s consumer watchdog has warned companies that using words like “green” and “sustainable” when describing their environmental strategies could be unlawful.

Such terms are vague and risk misleading consumers, according to draft guidance for firms released by the Australian Competition and Consumer Commission (ACCC) on Friday. Instead, they should be replaced with more specific language that clearly outlines environmental benefits, it said.

Australian consumer law “makes it unlawful for businesses to engage in conduct that is misleading or deceptive or is likely to mislead or deceive”, according to the guidance. That applies even if it was not the intent to mislead, and losses and damages did not occur, it said.

The warning comes as scrutiny of greenwashing – using environmental claims that are false or misleading – is growing around the world. Multinational companies are grappling with different legal opinions in various countries on what they can and can’t say about the impact of their activities on global warming.

The ACCC also advised companies to be direct and transparent when communicating how they are transitioning to more sustainable business models. For example, they should avoid saying they had achieved steps in a process if these were still ongoing, it said.

The commission has a history of combating greenwashing claims, and this has extended into areas such as targeting misleading endorsements by social media influencers and challenging Alphabet Inc’s Google over privacy policy.

Comments on the guidance can be made to the ACCC until Sept 15. BLOOMBERG