Greenwashing and sustainability collaborations are squarely in focus for the ACCC and ASIC in 2025. Recently:
Chair Gina Cass-Gottlieb re-affirmed the ACCC’s focus on greenwashing and sustainability issues when announcing the ACCC’s compliance and enforcement priorities for 2025-26 on 20 February 2025.
Deputy Chair Mick Keogh noted the ACCC continues to be firmly focussed on greenwashing in his keynote address at the Annual Sustainability Reporting Summit on 27 February 2025.
ASIC sharpened its focus on greenwashing, listing greenwashing and misleading conduct involving ESG claims as an enforcement priority for 2025 (as compared to misleading conduct in relation to sustainable finance, including greenwashing, in its enforcement priorities for 2024).
Over the past few years:
The ACCC commenced greenwashing proceedings against Clorox in the Federal Court which are poised to result in multi-million dollar penalties in 2025.
ASIC continued to target misleading conduct in relation to sustainability and greenwashing claims in Court against Vanguard, Merger and Active Super, resulting in record penalties for these types of claims.
There was an escalation in private litigation – the Australasian Centre for Corporate Responsibility’s case against Santos was heard, with Australian Parents for Climate Action’s case against EnergyAustralia and Greenpeace’s case against Woodside waiting in the wings.
Environmental and sustainability benefits have been increasingly cited in the authorisations context.
Regulators released a host of new guidance.
It is therefore an opportune time to draw on insights from recent developments and consider developments on the horizon.
What this means for you
Businesses should exercise caution in making environmental and sustainability claims, ensuring that they can be substantiated, given ongoing regulatory scrutiny and the risk of private actions.
Transactions and collaborative conduct with sufficient environmental and sustainability benefits may be authorised by the ACCC even where it considers that they would substantially lessen competition.
In parallel, ESG is facing headwinds both at home and abroad, leaving businesses between a rock and a hard place.
Greenwashing and greenhushing
On the consumer law front, greenwashing remains an enforcement priority for both the ACCC and ASIC.
In December 2023, the ACCC published the final version of its guidance for business regarding the making of environmental claims. This followed an internet sweep of greenwashing in early 2023 in which the ACCC found that more than half of the businesses reviewed made claims warranting further scrutiny. The ACCC foreshadowed that it would be asking businesses to substantiate such claims, which the ACCC put into action by increasingly issuing substantiation notices – in 2023-24, the ACCC issued 10 substantiation notices, as compared to just one in the preceding year.
In November 2023, the ACCC accepted a court-enforceable undertaking from MOO Premium Foods following an investigation ‘100% ocean plastic’ representations. In April 2024, the ACCC commenced its first greenwashing proceedings (since announcing it as an enforcement priority) against Clorox on very similar facts (as we discussed here). At the hearing on 7 February 2025, Clorox admitted to the contraventions and the parties put forward a proposed penalty amount of $8.25 million, with judgment being reserved.
In 2023, ASIC commenced three greenwashing proceedings against Mercer, Vanguard and the trustee for Active Super. These came to a head in 2024, with:
Mercer ordered by the Federal Court to pay an $11.3 million penalty by consent in August 2024, after it admitted making misleading statements about the sustainable nature and characteristics of some of its superannuation options.
Vanguard ordered by the Federal Court to pay a $12.9 million penalty in September 2024, after a contested penalty hearing, which followed the Federal Court’s findings of liability due to admissions Vanguard made in relation to claims about ESG screens applied to investments in a Vanguard fund in March 2024.
Active Super found by the Federal Court to have made misleading representations concerning its ESG credentials in June 2024 after a contested liability hearing – the contested penalty hearing (at which ASIC put forward a proposed penalty of $13.5 million, whereas Active Super submitted that a penalty of $2.456 million would be appropriate) was held on 17 December 2024 and judgment is pending.
ASIC reported in its half-yearly enforcement and regulatory update that in total it had made 47 regulatory interventions and 37 corrective disclosure outcomes relating to greenwashing in the 15-month period to 30 June 2024.
In the wake of the ACCC and ASIC’s success both in and outside of court and the recent comments on greenwashing from the ACCC’s top brass, regulators continue to convey a strong message of deterrence. The ACCC is alluding to several ongoing greenwashing investigations, and in its recent re-statement of priorities has stated that it will continue to proactively target greenwashing in sectors including energy, food, cosmetics, fashion, homewares and waste management. It has also indicated that highlighting what the ACL standard requires in the context of emissions claims will be an increasing area of focus going forward.
2024 also saw an escalation in private greenwashing enforcement action and complaints, as set out in the table below.
Type | Key developments | |
Private proceedings | Australasian Centre for Corporate Responsibility v Santos commenced in 2021 and the hearing was held from October to December 2024, with judgment being reserved. Australian Parents for Climate Action v EnergyAustralia (commenced in August 2023) and Greenpeace v Woodside (commenced in December 2023) await hearing. | |
Third-party complaints to regulators | Complaints have been made to regulators about, among others:
These have sometimes translated into enforcement action – the MOO Premium Foods outcome referred to above followed a complaint made to the ACCC by the EDO on behalf of Tangaroa Blue in December 2022. The complaints have largely related to:
| |
Ad Standards | A number of gas-related complaints made to the advertising regulator, Ad Standards (an industry body), have been successful, including against:
In October 2024, the Australian Association of National Advertisers (another industry body that publishes the codes administered by Ad Standards) launched its Environmental Claims Code, which is along similar lines (including referring) to the ACCC’s guidance for business regarding the making of environmental claims and has been in effect since 1 March 2025. |
The final report from the Senate inquiry into greenwashing (following hearings in April and May last year) is now due to land on 28 March 2025. Among other things, the inquiry considered environmental and sustainability claims made by companies in industries including energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing and footwear, as well as the advertising standards applicable.
An unintended consequence of greenwashing enforcement activity is the potential for greenhushing (for example, businesses choosing not to communicate environmental and sustainability initiatives due to fear of regulatory scrutiny).
The ACCC has sought to reassure businesses that they are not seeking to stymie sustainability-based competition through the making of legitimate environmental claims. Nonetheless, greenhushing is likely to become increasingly relevant over the coming year as some organisations seek to wind back net zero and other environmental commitments, both due to political headwinds and practical challenges with implementation.
Sustainability benefits and collaborations
From a competition perspective, environmental public benefit claims became increasingly prominent in 2024, featuring in around one-third of merger authorisation applications made to the ACCC.
At a recent conference in Hong Kong, Justice Michael O’Bryan, Federal Court judge and President of the Australian Competition Tribunal, referred to environmental benefits as the most significant driver of authorisation applications (apart from economic efficiency), citing Brookfield and MidOcean’s proposed acquisition of Origin, which was approved by the ACCC in October 2023. Although the transaction ultimately did not proceed for commercial reasons, the ACCC authorised the deal despite finding a material risk that the vertical integration of Origin with Brookfield’s networks business, AusNet, would give rise to a likely substantial lessening of competition on the basis that those concerns were outweighed by the public benefits of increased investment in renewable generation and storage projects and a consequent reduction in Origin’s emissions intensity (for further details, see our article here). His Honour also referred to the continued cooperation between major supermarkets on soft plastics recycling following the collapse of REDcycle in late 2022, for which authorisation was granted until 31 July 2026 on 27 February 2025.
In July 2024, the ACCC published a draft guide on sustainability collaborations for consultation, which:
Highlighted competition law risks of sustainability collaborations, including factors rendering proposed collaborations more or less likely to have the effect of substantially lessening competition.
Identified the authorisation process as a means of facilitating sustainability collaborations and providing guidance on how to go about seeking authorisation.
Set out types and examples of environmental public benefits and detriments.
For further details, see our article here.
In December 2024, the ACCC published the final guide, the substance of which remained largely undisturbed – key changes since the draft guide include:
Indicating that, although not the primary focus, some of the principles can potentially be extrapolated to the social aspects of ESG (e.g. modern slavery).
Highlighting the availability of additional alternatives and carveouts, such as class exemptions and small business exemptions.
Providing a quick guide and checklist for businesses.
Providing more tips on how to go about making applications.
Including additional hypothetical and real-world examples and case studies.
In publishing this guidance, the ACCC has sought to emphasise that competition law doesn’t need to be a barrier to sustainability collaborations that are low risk or deliver a net public benefit.
From a structural perspective, the ACCC has indicated it is closely monitoring new sustainability-driven markets, including those for electric vehicles, green hydrogen and circular economy initiatives, to ensure they remain competitive and are not subject to anti-competitive consolidation.
More broadly, net zero commitments and sustainability collaborations are facing increasing pressure, both abroad (particularly in the United States, under an emboldened second Trump administration) and domestically.
In November 2024, the Texas Attorney-General, joined by a number of other Republican-led states, commenced a federal antitrust case against BlackRock, Vanguard and State Street, alleging the investment management companies had colluded to push up energy prices by reducing coal supply under the guise of pursuing climate targets. As well as making false or misleading representations about their financial products and services, failing to disclose material information and engaging in unfair practices.
More recently, in January 2025, the Net Zero Asset Managers Initiative – an IFM-backed asset management company founded to promote the adoption of greenhouse gas reduction efforts – announced it would suspend its activities, review its structure and no longer disclose its membership list, citing the election of Donald Trump and “different regulatory and client expectations”, following the withdrawal of many signatories, including BlackRock.
This was followed by the news in early February 2025 that Jeff Bezos’s $10 billion climate and biodiversity Earth Fund had discontinued its support for the Science Based Targets initiative, an international body that assesses whether companies are decarbonising in line with the Paris Agreement.
On the home front, Opposition Leader Peter Dutton has proposed to wind back emissions reporting laws, as well as criticising banks for refusing to lend to creditworthy fossil fuels, forestry and agriculture businesses.
Further, some of Australia’s biggest companies, including Australia Post, Canva, Telstra and PwC, have recently left the government-backed Climate Active carbon neutral certification scheme, which has been the subject of controversy in relation to the treatment of offsets (particularly poor-quality carbon credits).