With the release of draft legislation for emissions trading in Australia, the implications of "green" advertising and its regulation through the Trade Practices Act 1974 was highlighted by the Australian Competition and Consumer Commission (ACCC) on Wednesday.
Shannon Murphy, assistant director at the ACCC, spoke at a breakfast seminar hosted by Cooper Grace Ward. She said that "green" advertising was being used by companies to make environmental claims which were a very powerful marketing tool and could be a big influence on consumers making purchases.
She said businesses need to ensure that any green claims were scientifically sound and appropriately substantiated.
David Grace, partner at Cooper Grace Ward, told Lawyers Weekly that there were a lot of questions about the standards that govern a decision on carbon claims. "It is hoped that a national standard will be released but at the present time there is no fixed standard," he said.
"[Murphy] made the point that misleading conduct can include science, [so companies] have to clarify [their] carbon claims ... from a scientific perspective. If [companies] don't substantiate it then there is danger of misleading consumers."
For example, said Murphy, companies must be cautious when making claims of carbon neutrality by indicating trees would be planted. They must take into account the growth of the tree before it will consume a certain amount of carbon, risks that fires could destroy the trees and the actual capability of the tree during the course of its life to consume carbon from the atmosphere.
The Commission has prosecuted a number of companies for misleading green claims, including Goodyear for representations of the carbon-friendly capacity of its Eagle LS2000 range of tires and the V8 supercars announcement that 10,000 trees would be planted to offset emissions from the championship series, when, in fact, it would take several decades to absorb just one year of racing.
Grace said the Commission appeared to be taking a very serious view on the way green advertising is used, which means marketing departments must ensure they accurately substantiate any green claims.
"It will mean that people will have to stay across the science that is behind their products and products' capability. The implications for companies' products for their carbon footprint [to be offset] are to make sure they are using reliable science," he said.
"So that will mean that they will have to ask the right questions of their suppliers so that they can make sure that what they sell to consumers is reliably described in their advertising or marketing programs. The commission will be taking a very close interest in those who do not do that appropriately."
- Sarah Sharples