Commerce Commission releases new environmental claims guidelines

The guidance now includes advice on making claims about material composition.

The Commerce Commission has released guidelines to help traders understand their obligations when making environmental claims, including how to avoid breaching the Fair Trading Act.

An environmental claim is a representation about the environmental impact of a good or service. They are sometimes referred to as ‘green claims’.

The guidance, which was last updated in 2008, now includes advice on making claims about material composition e.g. how and when to claim a product is plastic free, as well as making disposal claims such as whether an items is recyclable, compostable or biodegradable

Commission Chair Anna Rawlings said: “When making purchasing decisions based on environmental claims, consumers trust that these claims are reliable and accurate. Often consumers are unable to access the kind of technical information they would need to second-guess claims.

“Environmental claims can be a powerful marketing tool and traders are using environmental claims as a point of difference from their competitors. All traders, large and small, need to make sure their environmental claims are substantiated, truthful, and not misleading to avoid breaching the Fair Trading Act.”

The Environmental Claims Guidelines cover general principles and include examples of cases taken by the commission in the past. The guidelines remind traders to:

  • be truthful
  • be accurate
  • be specific
  • substantiate claims
  • use plain language
  • not exaggerate
  • take care when relying on tests or surveys

In designing these guidelines, the commission sought input from relevant industry bodies and other government agencies. These guidelines will be updated periodically to provide further guidance as case law, legislation or business practices evolve.

The new guidelines have been welcomed by WasteMINZ, which also released detailed guidance on how to advertise compostable plastic packaging earlier in the year.

“Over the last few years there has been huge interest in the public wanting to make more sustainable purchasing choices as they are concerned about the amount of plastic entering the environment,” Chris Purchas chair of WasteMINZ organics materials steering committee, said.

“An increasing amount of products are being advertised as being recyclable or compostable when in some cases there is very limited access to facilities which can process these items. We have also seen a number of products on the market claiming to be plastic free when they are made from compostable plastics.”

Janine Brinsdon, CE of WasteMINZ, said the organisation was pleased to see the Commerce Commission guidelines have incorporated some of its advice and “made it very easy for manufacturers, retailers and the public to decide if a claim is genuine or not”.

There are serious penalties for breaching the Fair Trading Act 1986 – companies can be fined up to $600,000 and individuals up to $200,000 per breach.

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