Australian Consumer Law and Marketing Ethics

So what is Australian Consumer Law and why is it important? To put it simply, it’s a law created by the Australian Government that protects consumers from certain unfair business behaviours. It states that businesses should not follow misleading or deceptive conduct and if they do, harsh penalties can occur.

Examples of misleading and deceptive conduct include: advertising false information, failing to disclose important information, and displaying information that gives off a false impression such as trying to pass off as another brand. Greenwashing and false claims on packaging, labelling, advertising, and promotions across all channels are also included in ACL. 

ACL and marketing ethics go hand in hand. Marketing ethics keeps businesses accountable and honest which helps gain and retain customers’ trust. This is important as customers will want to support a business that is truly sustainable, trustworthy, and has the potential to build a positive relationship. 

Environmental ACL Practices

Now looking at this from an environmental perspective, the first question to answer is what is green marketing? Green marketing involves advertising and promoting environmentally friendly products and services. If a business is sustainable, it is very beneficial to communicate these benefits as 83% of consumers said they were willing to pay more for sustainable goods, according to the 2024 Nielsen report. 

If an environmental claim is false or misleading, consumers face the consequences of having a limited ability to make informed decisions, paying more for an environmental benefit that doesn’t exist or losing trust in a company. 

Greenwashing

These false or misleading environmental claims can be known as greenwashing. Misleading information isn’t the only form of greenwashing. Omitting information is included too and can be just as deceiving to consumers. For example, stating “these coffee cups are 100% recyclable” but omitting that they are only recyclable through the businesses’ recycling scheme. 

Another important measure to take is avoiding broad or unqualified claims as it can confuse customers. Some examples of broad terms to avoid are: ‘green’, ‘environmentally friendly’, ‘eco friendly’, or ‘sustainable’. 

These claims are vague and can cause customers to think a product causes no harm at all to the environment which may not be true. Instead, specifically mention which chemicals the product is free from, the parts of the product that are sustainable, or what environmental steps have been taken. 

Visuals and Graphics

Visual elements and graphics are also aspects that can give a consumer the wrong impression and influence their decision-making. The Mobius loop, also known as the recycle symbol, is a common visual element used.

Without explaining the use of this symbol on a product, consumers can think the product is completely made of recyclable materials or that the product itself can be 100% recycled. Therefore, explicitly explaining what part of the product is recyclable or how much is made from recycled materials will give consumers a clear understanding. 

Evidence of Claims

Lastly, having evidence to back up your claims is an important part of being lawful and maintaining consumer trust. Such as saying: "In 2050, this product will be entirely produced from recycled sources.” This statement would need proof to say this claim is on track to achieve its goal.

Having evidence is also required when stating a product is of a certain quality or standard. For that reason, if environmental claims can be backed up with proof, are accurate, and use the correct language your sustainable efforts will be communicated effectively.  

The Energy Sector

A business in the energy sector can have many environmental advantages and points of difference. It is essential to consider The National Energy Retail Rules as they govern the sale and supply of energy (electricity and natural gas) from retailers to distributors and customers. The rules are made by the Australian Energy Market Commission. They include processes such as: allowing customers to switch between competitive retailers and declaring specific consumer protection information and measures. 

Just like environmental misleading claims, the energy sector has its own too. Saying your product is “energy efficient” should only be used if the product can be quantified towards existing benchmarks. If it can’t and isn’t, it can confuse consumers, preventing them from comparing products easily. Therefore, this misleads them and breaches the law. 

‘Green’ or 'renewable' energy is also commonly used therefore it’s important to have accurate information when using these terms. For example, when advertising your energy as ‘renewable’ or ‘green’ the percentage of energy that is obtained from renewable sources should be disclosed if it is less than 100%. 

Other ACL Benefits

Apart from preventing misleading and deceptive conduct, ACL can create other benefits. Such as creating competition between businesses with the incentive to minimise their environmental impact to gain market share. This will result in an overall cleaner industry which ultimately benefits everyone. 

As a business, it is also important to think about how you can tell your customers about your sustainability practices. Content creation is a good way to communicate what sustainability measures you undertake and how you are reducing your environmental impact. This will provide value as a business to your consumers and can open the door for interaction with your customers.

Staying Aware of ACL

Sometimes ACL gets unintentionally breached therefore, measures and practices can be followed to not breach it. The first step is to train and educate management and staff on their obligations at the business through a trade compliance program. This will teach them to identify, reduce, and rectify ACL breaches. This training will also result in the implementation of stricter approval procedures and regular checks for marketing materials that contain claims. 

Adding to this, staying within ACL guidelines will benefit your company further than following the law. Green marketing is an aspect many consumers consider when purchasing from businesses and if yours states your practices correctly, you may just be a top choice!

Ready to use your sustainable practices to grow your business? Get in touch with us today to find out how we can help.