The recent Federal Court decision in Australian Competition and Consumer Commission v Clorox Australia Pty Limited [2024] FCA 357 is a wake-up call for any business making environmental claims in Australia. The case not only highlights the Australian Competition and Consumer Commission’s (ACCC) increasingly proactive stance on greenwashing, but also demonstrates the significant legal, financial, and reputational risks businesses face when their sustainability messaging doesn’t stack up.
Here are the key takeaways from the judgment—and what they mean for your business:
1. Accuracy and Substantiation Are Non-Negotiable
The court found that Clorox breached Australian Consumer Law by claiming that its “GLAD to be GREEN” kitchen and garbage bags were made with “50% recycled plastic waste collected from the ocean.” In reality, the plastic was collected from communities near coastlines—not directly from the ocean.
This distinction mattered. The court stressed that environmental claims must be accurate and capable of being substantiated. Vague, feel-good language simply won’t cut it. Consumers are entitled to rely on the claims businesses make, and the ACCC will not hesitate to intervene where those claims are misleading.
2. It’s About the Consumer’s Perspective
Even though the packaging included a smaller disclaimer about “ocean bound plastic,” the prominent headline claim of “50% OCEAN PLASTIC RECYCLED BAGS” was found to be misleading. The court assessed the claim based on how an ordinary and reasonable consumer would interpret it—emphasising that headline statements carry real weight.
In short: if your boldest claims create a misleading impression, you’re at risk—even if the fine print tells a more accurate story.
3. Penalties Are Steep—and Getting Steeper
Clorox was fined $8.25 million, with the court making clear that the penalty was designed to avoid being written off as a mere cost of doing business. The judgment sent a message: large companies will face proportionally large consequences if they mislead consumers.
4. Expect Ongoing Oversight and Corrective Action
The consequences didn’t end with the fine. Clorox was also ordered to:
Implement a three-year compliance program under the Australian Consumer Law
Publish corrective notices on its website and social media for at least 90 days
This reflects the court’s broader focus on remediation and deterrence, and a commitment to long-term compliance—not just punishment.
5. Undermining Consumer Trust = Societal Harm
Significantly, the court acknowledged that misleading environmental claims cause more than individual consumer harm—they undermine public confidence in all sustainability claims. This damages trust, disadvantages honest competitors, and distorts the market.If you’re relying on eco-credentials as a competitive advantage, greenwashing—even if unintentional—can harm not just your brand, but the industry as a whole.
6. The ACCC Is Watching
ACCC Chair Gina Cass-Gottlieb stated plainly:
“Claims about environmental benefits matter to many consumers… When those claims are false or misleading, this is a serious breach of trust, as well as the Australian Consumer Law.”
The ACCC has made it clear that environmental marketing is a regulatory priority, and enforcement action will follow where businesses fall short.
The Bottom Line: Get Your Claims Right—Or Risk Everything
The Clorox case is a powerful reminder that environmental claims must be truthful, specific, and backed by evidence. Businesses must have internal systems for vetting sustainability language, and a strong grasp of how claims are likely to be perceived by real consumers.
If you’re not sure whether your marketing materials meet these standards—or you want to build safeguards before the ACCC comes knocking—we can help.
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