In today's world, it is not unusual for businesses to make claims about the environmental benefits of their services or products to consumers- it is however important to ensure that those claims are accurate. "Greenwashing" is a term, which generally speaking, refers to the making of false or misleading environmental claims, such as through advertising, marketing, packaging or representations. In fact, the English Oxford dictionary defines "greenwashing" as "the creation or propagation of an unfounded or misleading environmentalist image".1
This issue was recently highlighted in the first civil penalty proceeding by the Australian Competition and Consumer Commission ("ACCC") in the Federal Court of Australia ("FCA") against Clorox Australia Pty Ltd ("Clorox") for contraventions relating to "greenwashing" and for which the FCA ordered Clorox to pay penalties totalling $8.25 million.2
These contraventions related to the supply and promotion by Clorox of it's "Glad to be Green" kitchen tidy bags and garbage bags as being bags which were "50% Ocean Plastic Recycled".3 The assertion and message being relayed to consumers was that the bags were made of 50% recycled plastic waste collected from the ocean. In reality, the bags were not made of 50% ocean recycled plastic: rather, the bags were made using plastic resin at least 50% of which came from recycled plastic waste collected from communities with no formal waste management system located within 50km of the shoreline, plastic resin not derived from recycled plastic and processing aid and dye/ink.
In this case, the Court declared that Clorox, on multiple occasions between June 2021 and July 2023 in trade and commerce:
- engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of section 18 of the Australian Consumer Law, being Schedule 2 of the Competition and Consumer Act 2010 (Cth) ("ACL");4
- in connection with the supply, possible supply and promotion of
the supply of its products, made false or misleading
representations:
- about the composition of its products, in contravention of section 29(1)(a) of the ACL which states "A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: (a) make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use";5
- about the environmental benefits of its products in contravention of section 29(1)(g) of the ACL which states "A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:...(g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits";6and
- engaged in conduct that was liable to mislead the public as to the nature, the manufacturing process and the characteristics of its products, in contravention of section 33 of the ACL which states "A person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods".7
Whilst there was a disclaimer on the back of the packaging stating that the bags were "made using 50% ocean bound recycled plastic that is collected from communities with no formal waste management system within 50km of the shore line",8the parties agreed that the prominent statement "50% Ocean Plastic Recycled...."9 on the front of the packaging was not dispelled by any other information on the packaging.
Further, while the FCA acknowledged the seriousness of the contravening conduct in this matter, the circumstances were not considered to be in the "most serious category of environmental misrepresentation".10 This was due to the earnestness of Clorox in believing that their products would contribute to the reduction of plastic waste in the ocean and that they did not "deliberately engage in a strategy to mislead consumers as to the composition of their products".11
In this case, Clorox admitted to the contraventions and the FCA ordered the following:12
- Pecuniary penalties in the amount of $8.25m in respect of the contraventions;
- An injunction that Clorox be restrained from making representations to consumers in Australia that its products comprise or contain recycled plastic waste that was collected directly from the ocean or sea, unless actually the case;
- A requirement that Clorox establish and implement an ACL compliance program for a period of 3 years;
- that Clorox issue a corrective advertising notice; and
- that Clorox make a contribution of $200,000 towards the ACCC's costs in the proceeding.
This case demonstrates the need for accuracy in the marketing of a business' products and services, especially the making of environmental claims to attract consumers.
Should you wish to discuss this further, please do not hesitate to contact Felicity Cara-Carson.
Footnotes
1 Oxford English Dictionary (Website) https://www.oed.com/dictionary/greenwashing_n
2 Australian Competition and Consumer Commission v Clorox Australia Pty Ltd [2025] FCA 357 ("Clorox") at [3].
3 Ibid at [1]
4 Competition and Consumer Act 2010 (Cth) sch 2 ("Australian Consumer Law") s18.
5 Australian Consumer Law (n 1) s29(1)(a).
6 Ibid s29(1)(g).
7 Australian Consumer Law (n 1) s33.
8 Australian Competition and Consumer Commission v Clorox Australia Pty Ltd [2025] FCA 357 ("Clorox") at [16].
9 Ibid at [1]
10 Ibid at [81]
11 Ibid at [81]
12 Ibid at [3].
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
