Business purpose

Greenwashing: How small businesses in Australia can avoid misleading environmental claims

- August 4, 2023 2 MIN READ
greenwashing is bad for business

As small business owners, we are responsible to our customers, community, and planet to operate environmentally and sustainably. However, with the rise of greenwashing – the practice of making false or misleading claims about the environmental benefits of a product or service – it can be challenging to know how to communicate our sustainability efforts effectively, explains Ashley Olsson, founder of sustainability advisory firm, Evolveable Consulting.

Greenwashing is not only unethical; it can also harm our businesses by eroding consumer trust. Regulators such as ASIC and ACCC have put companies on notice that those caught deceiving consumers or investors through greenwashing are facing potential prosecution.

A recent internet sweep by the ACCC found that 57 per cent of businesses raised concerns about their environmental claims. ACCC found that some companies needed to use more specific environmental claims, provide sufficient evidence for their claims, set environmental goals without clear plans for achieving them, and confusingly use third-party certifications and symbols.

That’s why we need to take steps to ensure that our environmental claims are accurate, transparent, and backed by evidence.

Here are three key actions that small businesses can undertake to avoid greenwashing:

  1. Be specific about environmental benefits: Instead of making vague claims like “eco-friendly” or “sustainable,” provide clear and detailed information about how your business is reducing its environmental impact.
  2. Be transparent about sustainability goals and progress: Set measurable targets for reducing your environmental impact and regularly report on your progress towards achieving these goals.
  3. Be cautious when using third-party certifications and symbols: While these can be useful for demonstrating your commitment to sustainability, it’s essential to ensure that you’re using them correctly and not creating confusion for your customers.

By following these actions, small businesses can avoid greenwashing and build trust with their customers by demonstrating their genuine commitment to operating in an environmentally sustainable manner.

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