The Australian Competition and Consumer Commission has started issuing meaningful fines for misleading environmental claims. This isn’t just strongly worded letters anymore—businesses are paying six and seven-figure penalties for greenwashing.

If your business makes any environmental or sustainability claims in marketing, you need to understand what’s changed and what compliance actually looks like.

The Cases That Signal Change

Kmart’s “eco-friendly” bamboo products drew a $1.3 million fine in late 2025. The products were marketed as sustainable alternatives to plastic, but the bamboo was chemically processed in ways that undermined the environmental claims. The ACCC’s position was clear: you can’t make broad sustainability claims without substantiation.

A major energy retailer (unnamed in early reporting) is facing action over carbon offset claims. They marketed plans as “carbon neutral” but the offsets were of questionable additionality—projects that would’ve happened anyway. The case is ongoing but signals that carbon offset claims will face scrutiny.

Multiple fashion retailers have received compliance warnings about recycled content claims. Saying a product contains “recycled materials” without specifying the percentage, type, or verification method is no longer acceptable.

The pattern is clear: vague, unsubstantiated environmental claims will get you fined.

What Counts as Greenwashing

The ACCC has published guidance, but here’s the practical interpretation:

Broad claims without evidence. Saying your product is “eco-friendly,” “sustainable,” or “green” without specific, verifiable details is risky. These terms are vague and can’t be meaningfully substantiated.

Misleading comparisons. Claiming your product is “better for the environment” than competitors without clear, comparable metrics is problematic.

Omitting trade-offs. Highlighting one environmental benefit while ignoring significant negatives. Example: promoting a product as using renewable energy while omitting that production generates substantial chemical waste.

Unverified claims. Making specific claims (like “100% recycled content” or “carbon neutral”) without independent verification or clear methodology.

Aspirational goals presented as current reality. Saying your business is “carbon neutral” when you mean you’ve committed to a 2030 carbon neutral target is misleading.

The New Substantiation Standard

The ACCC’s enforcement approach requires businesses to substantiate claims before making them, not scramble for evidence after getting caught.

This means:

Documented evidence for every environmental claim. If you say a product contains 50% recycled content, you need supplier documentation, testing results, or third-party verification proving it.

Clear methodology for calculated claims. If you claim carbon neutrality, you need documentation showing: how you calculated emissions, what scope you included (1, 2, and 3), what offsets you purchased, and why those offsets are credible.

Reasonable basis for comparative claims. If you say your product uses “less plastic packaging,” you need data showing what you’re comparing to and how much less plastic is used.

This is more rigorous than many businesses are used to. Marketing teams can’t just add “eco-friendly” to copy without involving people who can actually substantiate the claim.

The Penalties Are Real

Fines under the Australian Consumer Law can reach $50 million for corporations. The ACCC has indicated they’ll pursue maximum penalties for egregious cases.

But beyond fines, the reputational damage from greenwashing enforcement is significant. Every case gets media coverage. Customers care about this stuff, particularly younger demographics.

Being publicly identified as a greenwasher is bad for business beyond the actual penalty amount.

What Businesses Should Do

If you’re making environmental claims—or planning to—here’s the practical compliance approach:

Audit current claims. Go through your website, marketing materials, packaging, and social media. Identify every environmental or sustainability claim you’re making. Can you substantiate each one with documented evidence?

Get specific. Replace vague terms with specific, measurable claims. Instead of “eco-friendly packaging,” say “packaging made from 80% post-consumer recycled cardboard, certified by [specific certification body].”

Document everything. Create a file showing how each claim is substantiated. Supplier certifications, testing results, calculations, third-party verifications. If the ACCC comes asking, you need to be able to show your work immediately.

Involve compliance early. Environmental claims shouldn’t be a marketing-only decision. Compliance, legal, and operations need to be involved to ensure claims are accurate and defensible.

Train marketing teams. Make sure people writing copy understand what claims are risky and what approval process is required for environmental claims.

Review regularly. Your evidence might become outdated. If you claim carbon neutrality based on offsets purchased in 2024, you need to ensure you’re continuing to purchase offsets. Regular reviews prevent claims from becoming outdated and inaccurate.

Carbon Neutral Claims Specifically

These are getting particular scrutiny. If you’re claiming carbon neutrality:

Scope matters. Are you only counting Scope 1 emissions (direct)? Scope 1 and 2 (direct + purchased electricity)? Or including Scope 3 (supply chain and product use)? Be explicit about what you’re including and why.

Offset quality varies. Not all carbon offsets are credible. The ACCC is skeptical of offsets that lack additionality (they would’ve happened anyway), permanence (carbon might be released back into atmosphere), or verification (no independent audit).

Using offsets to claim neutrality requires demonstrating the offsets are real, additional, permanent, and verified. That’s a high bar.

Reduction vs. offsetting. Leading practice is to prioritize emissions reduction and use offsets only for unavoidable emissions. If you’re claiming carbon neutrality while making minimal effort to reduce emissions, that’s vulnerable to challenge.

Third-Party Certifications

Independent certifications reduce risk but don’t eliminate it. If you’re using a certification mark (like Australian Certified Organic, FSC, or B Corp), make sure:

The certification is current. Expired certifications can’t support claims.

You’re using the mark correctly. Most certifications have specific guidelines about how their marks can be used. Follow them.

The certification actually supports the claim you’re making. Having a B Corp certification doesn’t mean every product you sell is sustainable. Be precise about what the certification covers.

Small Business Reality

Compliance isn’t just for big corporations. Small businesses making environmental claims face the same legal standard.

The ACCC has indicated they’ll focus on larger businesses and more egregious cases first, but that’s not a defense. If you’re making claims you can’t substantiate, you’re exposed.

For small businesses, the practical advice is:

• Make fewer, more specific claims
• Focus on claims you can easily prove
• Avoid broad, vague sustainability language
• Document everything

You don’t need expensive consultants for basic compliance. You need honesty about what you can and can’t substantiate.

The Cultural Shift

This enforcement approach reflects changing consumer expectations. People are more skeptical of environmental claims and more likely to call out greenwashing publicly.

The ACCC’s enforcement is partly consumer-protection driven and partly responding to public pressure for accountability.

Businesses need to shift from “what can we say?” to “what can we prove?” That’s a meaningful cultural change for marketing departments used to broad, aspirational language.

What’s Coming Next

Expect more enforcement cases in the next 12-24 months. The ACCC has signaled this is a priority area and they’re building expertise in environmental claims.

Potential areas of focus:

• Fashion industry sustainability claims (already receiving attention)
• Food packaging environmental claims
• Renewable energy and carbon neutral claims
• Greenwashing in financial services (sustainable investment funds)

If you’re in these industries, scrutiny is coming. Get compliant now.

The Practical Reality

Environmental claims can be a legitimate part of marketing if they’re true and substantiated. The goal isn’t to stop businesses from communicating genuine environmental benefits—it’s to stop misleading claims.

If you’ve genuinely reduced packaging waste by 40%, you should be able to say that. Just be ready to prove it.

If you’re making claims you can’t substantiate, stop making them. The risk is too high and enforcement is only getting more aggressive.

For detailed guidance, check the ACCC’s greenwashing guidelines and the Australian Packaging Covenant Organisation’s resources for packaging-specific claims.