Greenwashing Risks with Madelaine Holt from Holt Advisory

May 28, 2024
8 Minutes

Greenwashing Risks with Madelaine Holt from Holt Advisory

In a recent interview, we had the pleasure of speaking with Madelaine Holt, a seasoned competition and consumer law expert and founder of Holt Advisory. With over a decade of experience at the Australian Competition and Consumer Commission (ACCC), Madelaine shares her insights on managing greenwashing risks for businesses in Australia. 

This discussion is particularly timely given both the Australian Securities & Investments Commission (ASIC) and Australian Competition and Consumer Commission (ACCC) have pledged to step up on greenwashing crackdowns, with recent cases such as ASIC winning the greenwashing case against investment giant Vanguard, as well as ACCC taking GLAD bags manufacturer to court for '50% ocean plastic' claims.

Q1: Madelaine, can you give us some background on your career and the role of the ACCC?

MH: The ACCC, or the Australian Competition and Consumer Commission, is responsible for enforcing competition and consumer laws. It covers a wide range of activities from compliance, education, and enforcement to reviewing mergers and tackling scams and product safety issues. I spent over a decade at the ACCC, primarily in enforcement roles, dealing with issues like misleading or deceptive conduct. Recently, I started my own legal consulting firm, Holt Advisory. As someone ​​who loves competition and consumer law and has been heavily involved from a regulator’s perspective, I wanted to help businesses navigate and strengthen their understanding of these complex areas of law.

Q2: What is greenwashing, and what are the regulators focused on?

MH: Greenwashing is when a business or an individual makes a claim about the environmental friendliness, or the sustainability, or the ethical nature of their product, their service or even their company. When that claim either is untrue or can't be backed up with evidence, that’s referred to as greenwashing. It’s a compliance and enforcement priority for both the ACCC and ASIC.

The reason I think the regulators are really interested in it is the bigger role that sustainability is playing in our economy. We've got our net zero transition, and mandatory climate reporting that's coming up, and we have consumers taking sustainability into account more and more when making their purchasing decisions. With all those things going on, these regulators want to make sure consumers are getting accurate information and that businesses who are doing the right thing have a level playing field with their competitors.

Learn more with our blog on What is ‘Greenwashing’ and why does it matter?

Q3: Could you share some key pointers for businesses looking to understand the risks more?

MH: The ACCC has issued guidance for businesses to ensure their sustainability claims don’t fall foul with the Australian consumer law, in particular, misleading and deceptive conduct. The guidance is really common sense. It sets out eight principles for businesses to think about when they're making claims with anything to do with sustainability- It's tell the truth, tell the whole truth, and make sure you don't leave anything out. Make sure you think not only about the words, but the pictures and the colours and the whole context of the statement or the representation that they might be making. Making sure businesses have evidence to back up their claims is a really important part.

Download ACCC’s ​​Making environmental claims: A guide for business | ACCC 

Q4: What is the process for issuing regulatory guidance, and how can it assist businesses?

MH: When emerging issues like the bigger role that sustainability is playing in our economy come up, the ACCC can sometimes issue guidance that helps businesses to understand what the ACCC’s expectations are in relation to sustainability and how it interacts with our competition and consumer laws. 

As mentioned earlier, the ACCC has published guidance for businesses when making environmental claims. The ACCC also plans to publish guidance for companies seeking authorisation to engage in conduct that may contravene competition law. The ACCC can grant authorisation where the public benefit flowing from the conduct outweighs the public detriment and potential impact on competition.

A really good example of this is the Red Cycle authorisation. Red Cycle collected and recycled soft plastics from supermarkets. About 18 months ago Red Cycle stopped operating. So Coles, Woolworths, and Aldi sought authorisation from the ACCC to form a soft plastics taskforce. Now as you can imagine, three competitors in a highly concentrated market getting together to discuss a service that they're offering to consumers normally would raise red flags under our competition laws, but in this instance, the ACCC authorised those companies to do that. One of the reasons was a sustainability reason, that it was more likely that those soft plastics would end up being recycled if those companies could work together to solve the problem. 

Q5: What are your top tips for businesses wanting to make green claims and the evidence needed to back up these claims?

MH: Having your own evidence of green claims is the gold standard. Although the regulators are looking at this, my biggest tip is do not be afraid to make those claims. We want to see them, consumers want to see them, and they want to make decisions based on them. We want businesses to feel confident making claims and showing their competitors and their customers exactly where they stand on these issues. If they are going to do that, do it properly. Businesses should seek advice from in-house counsel or their law firm, and make sure those ACCC principles are being followed; It must be true. It must be fulsome and you must have evidence to back up the claim. The final thing I'd say is do not set and forget. Make sure you are reviewing what you are saying regularly. If you have an aim to reach a certain level of emissions by 2027, you get to mid 2026 and you're not going to reach those, you can't be making the same claims. You must constantly be reviewing and updating.

Thanks for joining us and sharing your insights Madelaine! If you’d like to learn more on competition and consumer law with Madelaine, reach out through Holt Advisory.

Watch our full interview with Madelaine Holt for more insights and practical advice on managing greenwashing risks.