The consumer experience of green claims in Australia

Online and off, consumers are bombarded with claims about green and sustainable features.

This report

explores the volume and types of green claims consumers see across social and mainstream media, and packaging and promotional material
seeks to understand what type of green claims influences consumers and how often consumers act on green claims
identifies factors that influence consumers trust of green claims and what happens if consumers find out a business has engaged in greenwashing.

Key findings

Green claims are everywhere

In 24 hours, our researcher documented 122 green claims across 17 sectors from groceries, personal care products, banking, and superannuation.

31%

Only 39 of 122 green claims had any supporting evidence or verification to provide confidence that the claim was accurate or meaningful.

74%

74% of people recall seeing green claims on product labels.

45%

Consumers are using green claims to make purchasing decisions. 45% of Australians always or often consider sustainability as part of their purchasing decision-making.

Young Australians and people who say they care about sustainability are more likely to recall and rely on green claims.

The top sectors where consumers are making purchases because of green claims:

55 %

55% of people who said sustainability was a key part of their decision-making recalled seeing green claims on ads in public space and physical displays compared to 6% of the general population

40 %

40% of Australians 18-24 years old said they used a trustmark to fact-check a green claim compared to 29% of the general population

47 %

Household cleaning products (47%)

42 %

General groceries (42%)

30 %

Beauty and personal care products (30%)

Consumers are worried that many green claims they see aren’t true

At least 50% of people said they were worried about green claim truthfulness across every sector.

Consumers are more likely to trust green claims from a local or small business, or claims that are accompanied with a trustmark.

56% of people said they are more likely to trust a green claim made by both small or local businesses and Australian businesses, while only 29% said they would trust green claims made by an international business.

Small or local

Trust 56%

International business

Trust 29%

69% of people said they were likely to trust a green claim that had a trustmark with it.

Trustmark

Trust 69%

Many consumers assume that a trusted third party is fact-checking green claims.

45% of Australians think someone checks green claims before they are used, either government, industry associations or Ads Standards.

Australians think a third-party is checking

45%

Consumers will react strongly if they find out a business has been greenwashing

47% of consumers said they would stop buying from a business if they found it the business had engaged in greenwashing.

35% said they would warn their friends and family not to shop with that business.

Would stop buying

47%

Tell family and friends

35%

What can we do to improve green claims for consumers?

Businesses need to take greater responsibility for green claims

Businesses proactively checking to see if the green claims they’re making are accurate and meet ACCC or ASIC guidelines.

Businesses being as transparent as possible and providing information on their websites about the steps they have taken to ensure green claims are true.

Businesses consumer-testing green claims before they hit the market, checking to see if advertising and marketing is accurately understood by consumers and genuinely helps them to make decisions. Businesses should release this research wherever feasible.

Businesses using their industry expertise by working with regulators to identify where players in their sector may be misusing green claims.

Industry associations using codes and sector-specific regulation to set standards for green claims relevant to their industry.

Regulators should continue to enforce the law and prioritise enforcement cases that target greenwashing. Based on our survey results, regulators should target enforcement activity at areas with the potential for greater consumer harms:

Trustmarks

Australian or small businesses

Energy sector

Superannuation

Banking and finance sectors

Where action has been taken overseas on international companies that also operate in Australia

Australia needs stronger laws to proactively stop greenwashing

Our current consumer protection system is focused on punishing harms that have occurred rather than preventing harms from occurring in the first place. Given the volume of sustainable claims in the market, and that many are failing to meet the basic voluntary guidance issued by regulators, Australia needs more solutions that stop unhelpful and misleading claims before they hit the shelves

Where to from here?

We want a future where consumers can trust green claims. This means that green claims will need to be both accurate and meaningful, helping people to find options that genuinely contribute to sustainability efforts.

To create this future, we need businesses, regulators and governments to take concrete steps to remove unhelpful or misleading green claims and to get better quality information into the hands of consumers.

CPRC welcomes the opportunity to work further on this issue with government, regulators, policy makers, academia and the community sector. If you are in one the above groups and would like a one-on-one briefing for your organisation, contact Kristal Burry on kristal.burry@cprc.org.au

About the Author

Kristal Burry

Policy and Program Director

Kristal Burry, has extensive experience in the energy and water sectors. Kristal has worked for the federal government on a range of energy issues from electricity and gas pipeline regulation through to residential energy efficiency measures.