1. Australian Consumer Law, Marketing Claims and Climate Change Impacts

Consumer law facilitates and encourages consumer purchasing by giving individuals certain consumer rights against traders and guaranteeing certain protections against physical and economic harm. Specific laws protect consumers against identified risks when they purchase certain goods and services such as food, pharmaceuticals, financial services and so on. In addition, the Australian Consumer Law (ACL) contains a set of general guarantees and protections that apply across every area of consumption.^[1] The ACL prohibits misleading or deceptive conduct and unfair trading practices, including certain unfair contract terms. It also contains protections against unsafe or faulty goods and services. In this chapter, our focus will be mainly on section 18 of the ACL, the prohibition on misleading and deceptive conduct, and associated prohibitions on false and misleading representations (section 29) and other misleading conduct (sections 33 and 34) (see Box 1).

Consumer law is not directly concerned with environmental protection. Rather it is one way in which the law supports and enables the economic and social systems of consumption that contribute to the level of production of greenhouse gases (GHG) driving the climate crisis. The historical development of consumer rights and protections is closely linked with the rise of ‘consumerism’, which is the idea that people should pursue their individual interests and realise their personal identity and social status through the consumption of various goods and services.^[2] Fundamental to liberal social orders and capital-based economies, consumerism sees it as a significant, even dominant, aspect of people’s ‘civic’ duty to contribute to economic productivity and growth by earning and consuming.^[3] The market is expected to allocate goods and services effectively and efficiently.^[4] Marketing, including green marketing, which will be the main focus of this chapter, promotes consumerism by driving continued demand for products and conveying cultural ideas about how consuming particular products will enhance one’s life and identity.

Consumerism contrasts with ideals of citizenship that emphasise the responsibilities of individuals to contribute to the social order through political and social action and not just economic activity. These responsibilities of citizenship include participation in democratic governance processes, respect for the dignity and rights of all human beings, and increasingly the protection of the environment and other species.^[5] The narrow focus of consumer law on the rights of individuals as consumers does nothing to address the need to regulate systems of unsustainable production and consumption in the collective interest, for example by placing limits on the production and marketing of GHG-intensive products like petrol vehicles, air travel, single use plastics, fast fashion, meat and dairy products, and many household products and appliances.

This distinction between consumerism and citizenship is blurred by the commercially promoted and widely held belief that consumers can meaningfully tackle the climate crisis by choosing climate-friendly products. For example, many household products now carry energy ratings which encourage consumers to buy the most energy efficient refrigerator, airlines offer carbon offsets as an add-on to their flights, and many products now advertise themselves as ‘climate-active’ or ‘climate-neutral’ or make other environmental and climate related claims. Underlying such marketing efforts is the idea that consumers can ‘vote with their dollar’ and that the tension between consumerism and environmental responsibilities can be resolved by being a climate conscious consumer. The claim here is that consumers’ purchasing choices will shape the market to drive positive change for the collective environmental good:^[6] the more consumers purchase climate-friendly products, the more businesses are incentivised to take climate action to attract more consumers, thus driving climate action through climate conscious consumption. And vice versa, the more that businesses advertise their products as climate friendly, the more consumers will be informed and make more climate conscious choices. Climate conscious consumerism therefore relies heavily on green marketing.

In order to assess the strengths and limitations of this approach, we therefore need to examine the role of consumer law in prohibiting false and misleading marketing. Climate conscious consumerism relies on consumers having meaningful and accurate information about the climate credentials of different products and services to inform their choices. In this ideal of environmentally responsible consumption, consumer law therefore has an important role to play in ensuring that the marketing information consumers receive is accurate and meaningful. False, misleading or deceptive marketing claims about the environmental credentials of a product, service, brand or company is ‘greenwashing’. Where the false, misleading or deceptive environmental claims relate to the climate, we call this ‘climate greenwashing’. Box 1 sets out some of the ways greenwashing can breach consumer law.

Climate greenwashing weakens the incentives for business to reduce emissions, as they can make climate claims and then benefit from increased sales to climate conscious consumers without having to significantly change the way they produce goods and services. Because many consumers are prepared to seek out and pay more for climate-friendly products and are willing to publicly criticise businesses which do not act on climate change, the incentives for business to increase profits by greenwashing are high. Greenwashing also has a political effect. As it becomes more obvious that strong climate action is needed, greenwashing can stave off stricter government regulation and public concern by making it appear that businesses are voluntarily doing more to mitigate and adapt to the climate crisis than they really are. As a result, the evidence shows that greenwashing is frequent and ubiquitous.^[7]

As the climate crisis worsens and more businesses make claims about their climate friendliness, regulators and climate advocacy bodies are turning to consumer law to protect against greenwashing. In the following section we set out how the Australian Competition and Consumer Commission (ACCC) and environmental advocacy groups have used the ACL to combat climate greenwashing. The Australian Securities and Investments Commission (ASIC) is also taking steps to prevent greenwashing regarding financial services using similar prohibitions.^[8]