Green is good, right? Not always, says the ACCC and ASIC in a big week for greenwashing

The words ‘eco-friendly’, ‘net-zero’, ‘sustainable’ and ‘green’ are ubiquitous these days.  And rightly so!  With a seismic shift in attitudes and awareness over recent years, companies are racing to demonstrate how ‘green’ they are. In addition, investors, consumers and governments are demanding boards address environmental, social and governance (ESG) issues.

Many companies have risen to the challenge of embracing ESG standards within their businesses. This is a positive step for shareholders, investors and the environment.

However, other companies are spending more time and money on marketing ‘green’, than on actually reducing their environmental impact. Although not a new phrase, ‘greenwashing’ is suddenly the new word on everyone’s lips.

What’s the latest from the ACCC?

Last week, the ACCC signaled that it will be investigating a number of businesses for potential greenwashing. This announcement was made following a recent online sweep, where it was concerningly found that 57% of companies reviewed had made vague or unclear environmental claims.[1]   

The online sweep indicates that whilst attempts to embrace ESG standards may be genuine and well managed by some companies, others may run the risk of greenwashing such that they positively misrepresent their offerings as being sustainable, environmentally friendly or ethical to lure in ESG conscious investors and consumers.

The ACCC’s view is that it will positively investigate companies and request they substantiate their ESG claims. If a company cannot substantiate their ESG claims, then heavy fines and penalties will be incurred, along with substantial brand damage. Already, several active investigations are underway.

In a somewhat timely move, only a day after the ACCC made its announcement last week, Greenpeace Australia Pacific asked the ACCC to investigate whether environmental claims by Toyota were misleading or deceptive. The greenwashing complaint, filed on 3 March 2023 by the Environmental Defenders Office on behalf of Greenpeace, focuses on claims about the environmental performance of Toyota’s vehicles and its net zero ambitions.[2]

What’s the latest from ASIC?

It is not just the ACCC that is concerned about greenwashing. Like many other financial regulators globally, ASIC is also cracking down on greenwashing. Last week, ASIC launched its first court action for greenwashing conduct.

ASIC’s first court proceeding for alleged greenwashing misconduct comes as little surprise following the release of ASIC’s Enforcement Priorities for 2023 (Enforcement Priorities). As set out in the Enforcement Priorities, ASIC is committed to directing its resources and expertise on issues of misleading conduct, including ‘greenwashing’ in the financial industry.[3]

Since October 2022, ASIC has issued over $140,000 in infringement notices over concerns for greenwashing, the first infringement notice being issued to listed energy company Tlou Energy Pty Ltd (Tlou) (see here for more). ASIC has now taken one step further and has launched the first court proceedings against alleged greenwashing by Mercer Superannuation (Australia) Limited (Mercer).

The action against Mercer is in relation to alleged statements made on Mercer’s website about 7 investment options marketed as ‘Sustainable Plus’. These statements marketed the ‘Sustainable Plus’ investment options as suitable for members who ‘are deeply committed to sustainability’ because they excluded investments in companies involved in carbon intensive fossil fuels.[4] The exclusions also applied to companies involved in alcohol production and gambling.[5] However, ASIC now alleges that members who took up the ‘Sustainable Plus’ options had investments in companies involved in these excluded investment industries, despite the website statements saying they were excluded.[6] In doing so, ASIC alleges Mercer made false and misleading statements and engaged in conduct that could mislead the public.

Now What?

There is no doubt that ESG has become increasingly important for many companies, from an ethical perspective, an employee engagement perspective and from a brand positioning perspective. However, it is equally as important to ensure that the risk of greenwashing is minimized to preserve reputations and avoid penalties and court action. Although it may sound simple, the safest approach is to simply ensure that any statements (including headline claims) made to promote sustainability are:

  • reasonably validated and supported with data and a robust plan of action;
  • accurate and clearly communicated, without the use of vague terminology; and
  • adequately explained and given in context.

ASIC has provided some further helpful guidance (see here).

The ACCC also encourages businesses to come forward, if they become aware that they have made false or misleading marketing claims. According to the ACCC, businesses who cooperate and advise of any issues will be considered more favourably than those who wait for the ACCC to unearth these problems.[7]

[1] ACCC Media Release: 2 March 2023:

[2] Greenpeace Media Release: 3 March 2023:

[3] Australian Securities & Investments Commission, ASIC Enforcement Priorities (Web Page, 2023) <>.

[4]Australian Securities & Investments Commission, 23-043MR ASIC launches first Court proceedings alleging greenwashing (Web Page, 28 February 2023) <>.

[5] Australian Securities & Investments Commission, 23-043MR ASIC launches first Court proceedings alleging greenwashing (Web Page, 28 February 2023) <>.

[6]Australian Securities & Investments Commission, 23-043MR ASIC launches first Court proceedings alleging greenwashing (Web Page, 28 February 2023) <>.

[7] ACCC Media Release: 2 March 2023:


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This information and the contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders, and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.