The consumer watchdog has uncovered high levels of greenwashing by businesses misleading Australians about their environmental credentials.

The Australian Competition and Consumer Commission revealed on Thursday that more than half of 247 businesses reviewed for greenwashing in a recent review had made “concerning claims” about their environmental actions.

ACCC deputy chair Catriona Lowe said businesses will be asked to substantiate claims made in advertisements, on their websites and through their packaging.

Greenwashing is defined as a practice where businesses make untrue or embellished claims about their environmental record, practices or the actions to combat the climate catastrophe in their marketing strategies.

‘Warrants further scrutiny’

“Our sweep indicates a significant proportion of businesses are making vague or unclear environmental claims,” Ms Lowe said on Thursday.

“This warrants further scrutiny.”

The ACCC is investigating businesses for greenwashing. Photo: Getty/TND

The ACCC fears companies are breaking consumer laws by making false or misleading claims to consumers about their environmental credentials.

More than ever, consumers are making purchasing decisions based on environmental grounds, making valid claims crucial, Ms Lowe said.

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

Active investigations under way

“This conduct harms not only consumers, but also those businesses taking genuine steps to implement more sustainable practices.”

“Several active investigations” are under way.

No specific businesses were named, but the ACCC said they were in the consumer packaging, food manufacturing and medical devices sectors.

Others, including cosmetics, clothing and footwear, and food and drink companies had the highest levels of “concerning claims”.

Businesses under investigation will be required to provide proof that the claims they’re making to consumers can be substantiated.

“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,” Ms Lowe said.

The ACCC is prepared to take enforcement action against businesses, but also stressed an emphasis on education too.

“The sweep has helped inform our forthcoming guidance about what steps businesses need to take to improve the integrity of their environmental claims,” Ms Lowe said.

“We want to see businesses taking steps to ensure that environmental claims are accurate as well as meaningful for consumers. Our sweep has shown that claims are most useful where they are relevant, clear, reliable and transparent.

“We will engage directly with businesses and industry associations to improve compliance with the Australian Consumer Law.”