How to avoid greenwash

It’s a call from the Commerce Commission that you don’t want to receive.
Corinne Blumsky


Businesses making ‘green’ claims in their advertising should do so with care. A phone call from the Commerce Commission is one you don't want to receive.

Just ask the two Australian businesses that were recently found to be in breach of legislation equivalent to our Fair Trading Act.

An advertising campaign launched by V8 Supercars Australia said that 15,000 native trees would be planted to fully offset the carbon emissions created by the V8 series.It claimed the carbon emissions that would be offset included the transport of the racing teams, air travel to events and other activities, as well as the V8 series itself.

The wording of the claim was considered to suggest or imply the trees would quickly absorb the carbon emissions. In fact, it would take several decades to absorb the carbon emissions from that year’s racing.

V8 Supercars Australia was required to give an enforceable undertaking that:

  • any future claims made about ‘green marketing’ will be first vetted by a solicitor to ensure that it complies;
  • any future claim it makes about planting trees to offset carbon emissions will include an explanation about the time before those emissions will be offset;
  • the commission’s concerns and the undertaking will be placed on the ‘Racing Green’ pages of the V8 Supercars website.

GM Holden came under fire for its advertising campaign promoting certain vehicles in the Saab range using terms like “Grrrrrreen”, “Every Saab is green. With carbon emissions neutral across the entire Saab range”, “Shift to neutral”, and “Saab will plant 17 native trees on your behalf in the first year as a carbon offset”.

The Australian equivalent of the Commerce Commission said these claims could mislead consumers about the carbon neutrality of motor vehicles in the Saab range. During proceedings, GM Holden said that no vehicle in the Saab range was carbon neutral over the life of that vehicle. And that planting 17 native trees would not offset more than one year’s carbon dioxide of any Saab vehicle.

GM Holden got off lightly. It was not required to do corrective advertising as the campaign was of a short duration, the campaign was more than a year old, and the continuing impact of the statements was considered limited.

Being caught greenwashing can be expensive. If your claims are found to breach the Fair Trading Act you could face a fine of up to $60,000 for an individual and $200,000 for a company

Closer to home, a Wellington taxi company was recently warned by the Commerce Commission for publishing false and misleading information on its website in its ‘Going Green’ campaign.

The company claimed that its LPG cars “reduce CO2 pollution by up to 25%” and the Nissan Maxima 3.5 litre V6 petrol engine CVT transmission is 20% more fuel efficient than traditional automatic transmissions”.

Given that these claims could not be supported, the company agreed to change its claims. The taxi company was also advised to change its compliance processes to ensure future representations were accurate.

Being caught greenwashing can be expensive. If your claims are found to breach the Fair Trading Act you could face a fine of up to $60,000 for an individual and $200,000 for a company.

Claiming your product or service is green when other factors would clearly lead a consumer to consider your product or service not so green need to be part of the mix. It is important to consider what you are claiming from the consumer’s view. And remember consumers are being educated about green marketing. The internet is awash with articles and blogs on the subject.

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