The Costly Business of Making Flimsy Sustainability Claims in Australia

June 2, 2023
Resources
4 mins

In a world where citizen journalism is the norm and making one wrong business decision can cause irreversible reputational and financial damage, it’s crucial to ensure any sustainability claims can be fully supported.

Sustainability is a hot topic of critical importance for the Australian food industry. Australian Government commitments to the reduction in emissions and waste reflect consumer interest in transitioning to a Net Zero economy in attempting to solve environmental problems. A New Scientist article (published in September 2021) highlighted the impact that our diets have on climate change — with food production making up over a third (37%) of global greenhouse gas emissions.

Many established brands are already making strides to be more sustainable with support on initiatives from 3^rd Party certification schemes, while new players are continuing to enter the market with sustainable values at their very core.

What sustainability claims can be made about food in Australia?

When promoting your sustainable credentials to drive consumer purchasing decisions towards your brand, you first must have suitable substantiating evidence. This is the case whether the claims are product or company-specific claims and/or whether using logos associated with 3^rd Party certification schemes. Without such evidence your claims may be false, misleading and/or have no reasonable basis; otherwise known as ‘greenwashing’.

Food businesses must be particularly careful when making product and/or company sustainability claims without certification from a 3^rd Party scheme. When drafting product and company claims, businesses should start by asking the following questions:

Is the claim ACCURATE?

How is the claim SUBSTANTIATED?

Is the claim SPECIFIC?

Is the claim in PLAIN LANGUAGE?

Does the claim state a REAL benefit?

What is the CONTEXT for the claim?

What GRAPHICs are used in imagery?

Does the claim consider the product’s LIFE CYCLE?

What is the OVERAL IMPRESSION of the label?

Product and company claims should always be specific, accurate and completely state real benefits whilst cognisant of the environmental impacts throughout a product’s life cycle, apply simple language without jargon, include limitations and only convey an overall impression that is true and accurate. Avoiding general, broad, and non-specific claims like ‘green’, ‘kind to the planet’, ‘eco-friendly’, ‘responsible’ or ‘sustainable’ is the best way to start. Such claims may lead consumers into error. Different meanings may apply in the absence of adequate information, making correct purchasing decisions difficult. Similarly, claims engaging the logos of 3^rd Party schemes must comply with the scheme requirements and not mislead consumers.

The risk of making unsubstantiated sustainability claims in Australia

It’s risky business to make unsubstantiated sustainability claims. There are plenty of knowledgeable consumers, journalists, and activists who will not always take what you claim at face value but will look deeper into your actions. Your Australian food experts at Ashbury will be able to protect your business from this by ensuring complete compliance from the get-go.

In March 2023 the Australian Competition and Consumer Commission (ACCC) published findings from its October – November 2022 internet sweep of businesses making environmental claims. Over half (57%) of all businesses identified were found to have ‘concerning claims’ when considering the ordinary consumer’s understanding of what the claims mean. Of the 37 food businesses reviewed, 65% are making concerning claims. In the sweep, Australia’s food and beverages sector followed the cosmetic and textile sectors with the third greatest proportion of concerning environmental claims.

The ACCC identified high-level issues including businesses using vague or unqualified claims, claims that lack sufficient evidence, false or misleading absolute or claims exaggerating benefits (or claims that omit essential information), setting goals without plans for achievement, and/or using the trademarked logos of 3rd Party certifications in a confusing manner. When using 3rd Party certifications, several businesses are applying the certification trademarks in a potentially misleading way. Satisfactory descriptions of the nature and significance of the scheme applying to the product or business are absent, for example. Using the word ‘certified’ in broad statements giving the overall impression the entire business is certified, when only the product is, is also conduct misleading consumers.

The ACCC advises it will be conducting further analysis of the issues and will undertake enforcement, compliance, and education activities as appropriate. Depending on the circumstances, enforcement action may involve administrative resolutions, infringement notices or legal proceedings. Enforcement action can cause irreversible damage to a brand both financially, and reputationally.

Regardless of the size of your brand or business, or how successful your product is now, making sure you take appropriate steps to provide clear and accurate information to your consumers is paramount.

If you need any support on sustainability claims, or on any aspect of compliance in your product development process, contact a member of the Ashbury Global food consultants Australia team today — we’d be happy to help.

Useful References:

Greenwashing by businesses in Australia (accc.gov.au)

Author: Janine Curll

With a a PhD(law) in Australia's food regulatory compliance framework, a Bachelor of Laws and a Bachelor of Science in Microbiology, Janine brings 20-years of experience providing exceptional regulatory, legal and compliance advice across food product development in the FMCG sector. She specialises in identifying opportunities for competitive marketing with labelling and advertising claims and is a food fraud expert who has led domestic and international investigations, and pioneered research in this emerging field.

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