Australian companies that advertise lower emissions should say plainly when those cuts come from carbon credits bought elsewhere, according to guidance the Australian Competition and Consumer Commission (ACCC) published on Oct. 20. The guidance treats credits as a complement to a company's own reductions. A business that presents the two as equivalent, or says one cancels out the other, needs reasonable grounds for the comparison.
The ACCC is applying existing law. The Australian Consumer Law already prohibits false or misleading representations and misleading or deceptive conduct, and the guidance sets out how the regulator reads those prohibitions when a company describes its carbon footprint. Sustainability claims about financial products such as managed funds fall under the Australian Securities and Investments Commission Act instead, the ACCC said in its media release.
Checklist Targets Credits, Double Counting and Future Targets
The guidance gives companies a set of checks to run before a claim goes out. The first asks how an average consumer would read the message and whether that impression matches what the company actually did. Claims should rest on complete and reputable accounting that discloses emissions boundaries, baselines and anything excluded, and the ACCC said businesses should use credible, science-based accounting standards.
Broad or highly selective statements are discouraged. A company relying on credits should say so and separate direct reductions from credits bought from projects elsewhere. Each credit, certificate or emissions benefit can be claimed once, and companies are expected to keep their voluntary efforts distinct from legal obligations and from changes available to every business.
Claims about the future get their own test. A net zero date or interim target needs reasonable grounds, and the wording should make clear what is underway and what is still a plan. Some large companies have already moved away from vague carbon neutral advertising and distant targets that disclosed little about their reliance on credits, the ACCC said. European lawmakers adopted green claims rules covering similar ground.
Greenwashing Has Been an ACCC Enforcement Priority Since 2023
Greenwashing has been on the ACCC's list of compliance and enforcement priorities since 2023. Clorox Australia was ordered to pay penalties over ocean plastic claims on certain GLAD products. The regulator has also brought cases against Australian Gas Networks over a renewable gas campaign and against the maker of Banana Boat and Hawaiian Tropic over reef friendly sunscreen labels, the kind of product and packaging claims other jurisdictions have also pursued.
Offset-heavy climate reporting has its own critics, who question how that progress gets counted. The emissions guidance sits alongside the ACCC's 2023 guide to environmental claims, and the regulator said it will continue to monitor emissions advertising and may take targeted enforcement action.
