A notable omission from the Bureau’s public consultation is the new public interest test for private parties seeking leave from the Competition Tribunal to bring legal proceedings against companies and individuals for deceptive marketing practices. What constitutes public interest in this context is not yet defined, and there is no precedent yet on how this provision will apply.
The Bureau and the Tribunal will determine what, if any, penalties to impose on companies found to be non-compliant. Under the new greenwashing provision, companies cannot consider principles, factors, or assessment criteria to understand their compliance risk.
One can only speculate why the Bureau did not ask the public for feedback on these two critical issues.
Even in the face of this uncertainty, what is certain is that companies must now substantiate claims made to the public about the benefit of a product, business, or business activity related to protecting or restoring the environment or mitigating the environmental, ecological, and social (for product claims only) causes or effects of climate change. Those who cannot back up their claims will face stiff penalties.
Although greenwashing – making exaggerated, inaccurate, or misleading statements about an organization’s environmental and social impact – is not new, it has become more prevalent and problematic in recent years as the demand for ESG information and the scrutiny of stakeholders has grown. What is more, opinions are divided on the new greenwashing provisions. Some believe they will deter companies from voluntarily disclosing their efforts to reduce their environmental impact, while others argue these provisions are modest amendments which do not go far enough.