How Australia took the lead in policing greenwashing | Podcasts | Eco-Business
It was the latest case of greenwashing to make headlines in a country that is taking exaggerating green claims more seriously than most in the region. While Japan, South Korea, and Singapore have taken some measures to curb greenwashing in recent years, none have gone as far as Australia, where stiff penalties have been imposed on major brands for greenwashing over the last year.
Even as cases of greenwashing have declined globally as environmental, social and governance (ESG) language fades from the corporate lexicon, in Australia, greenwashing has remained a mainstream issue as regulators and consumer groups have pursued questionable green claims in the courts.
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The main thing for companies to remember is that no one is expecting you to be perfect. People just don’t want to be lied to.
John Pabon, sustainability consultant and author, The Great Greenwashing
In April, Australia’s federal court fined household goods company Clorox A$8.25 million (US$5.38 million) after finding the company had falsely claimed its GLAD-branded kitchen and garbage bags contained “50 per cent ocean plastic”, when actually the plastic had not been collected from the ocean.
In March last year, the federal court ruled that investment firm Vanguard had misled investors by claiming its ethical bond fund would exclude certain fossil fuel investments, when in fact it had invested in oil and gas exploration. The company was fined AU$12.9 million (US$8.9 million).
In May this year, EnergyAustralia was forced to publicly apologise to its customers after the federal court found the electricity and gas firm guilty of greenwashing its “go neutral” carbon offset product following a complaint lodged by Parents for Climate. The non-profit claimed EnergyAustralia customers were falsely led to believe the fossil fuel-based energy they bought would not contribute to climate change.
Joining the Eco-Business Podcast to discuss how Australia has taken the lead in tackling greenwashing is John Pabon, a former United Nations policy analyst and China-based Business for Social Responsibility strategist who now runs sustainability consultancy Fulcrum Strategic Advisors. He authored the book,
John Pabon, sustainability consultant and author, The Great Greenwashing. Image: John Pabon / LinkedIn
Tune in as we discuss:
- How did John Pabon get interested in greenwashing?
- Greenwashing cases in Australia this year
- How did Australia get to grips with greenwashing?
- Has Australia been influenced by Trump and a pivoting Europe?
- Why are companies still falling into the greenwashing trap?
- Greenhushing and corporate vulnerability
The full transcript:
Tell us about your interest in greenwashing.
I’ve been in the sustainability space for a few decades now, starting off at the United Nations in New York, and then moving into where I honed my talents in sustainability, living in China for a decade, working on the social side of sustainability, in and out of more factories than I care to remember, building worker betterment programmes.
Now I am currently in Melbourne. I came to Australia because I felt the market needed a little bit of a kick in the rear when it came to sustainability. And what I was particularly seeing here were a lot of issues around greenwashing and also greenhushing. So the dichotomy of the two extremes when it comes to doing things for the planet.
Tell us about what you have noticed this year in terms of cases of greenwashing in Australia.
Well, it certainly hasn’t let up, which is a great thing. And I think it’s not necessarily the government pushing regulation top down, although that is also what’s happening. A lot of this is being pushed from the consumer perspective, so consumers bringing cases through the Australian Competition and Consumer Commission (ACCC) to the courts.
So what we’ve seen this year, was GLAD bags. The Clorox company was fined over $8 million for claiming that the materials they used were recycled when they sort of weren’t.
Energy Australia, very recently, Parents for Climate [a non-profit] brought them to Federal Court. EnergyAustralia was forced to apologise to half a million customers for their dodgy claims around carbon credits.
Santos as well as Woodside have been in federal court. And just today, Woolworths has been brought forward for claims around I believe it’s their use of wood or agriculture practices.
So it continues to happen.
It’s a great thing to know that consumers are actually knowledgeable and we are not reliant on the government. It’s never a good thing to wait on the government to act.
How is it that Australia has been so progressive at tackling greenwashing?
Australia is one of those markets like Japan where you assume they are a little bit more advanced when it comes to sustainability. But when you start to dig into it, you realise that they are a few decades behind the rest of the world.
The impetus behind the push to tackle greenwashing was an article by Polly Hemming from the Australia Institute headlined “State sponsored greenwashing” [which argued that there were no robust mechanisms to address misleading climate claims, because of the influence of major emitters over climate policy]. It was a very long article. It got a lot of traction and I think that probably woke the government up too that something needed to be done.
Also, the government is trying to bid for the next COP climate talks in 2026, so they are trying to clean up their act and do more to push more corporations, particularly the large domestic corporations – which are not the most sustainable in their practices – to be better. Mandatory climate reporting is coming in at the end of this year in phases, which maybe is a little bit behind the rest of the world, but at least it’s happening. As well as a lot of the greenwashing work that’s been going on.
In fairness to Australia, what tends to happen, not just in sustainability but in industry writ large, is they may be a little bit behind, but they do capitalise on that to then leapfrog, which has happened with greenwashing regulation and sustainability.
Tell us how a variety of different stakeholders have helped clamp down on greenwashing in Australia?
I don’t think I’ve lived in a city like Melbourne, which is so progressive and left leaning – everybody knows everything about the environment and they care so much and they go to pains to be good to the planet – that runs so contrary to a lot of what the government and industry does, which is the other end of the spectrum.
We are talking about a government and an economy that is essentially propped up by very dirty industries that love to dig things out of the ground. So the government is obviously not going to rock the boat too much [by clamping down on major industry] when that’s where the economy is.
But it’s about finding that balance. It’s an interesting time period we are in now here where the people and the government are trying to balance things out. Is it perfect? Absolutely not. Is it going to happen tomorrow? No, of course not. This is highly nuanced and it’s going to take a very long time.
But progress is starting to happen. And you are starting to see a lot more informed consumers talking about this stuff more openly, and criticising the government more openly [on sustainability issues]. And as we know in most places around the world, when you get a critical mass of people critiquing the government on a particular issue, the government tends to move.
To what extent has Australia’s approach to greenwashing been influenced by what’s happening in other countries, such as the United States under Trump and the European Union, where the Green Claims Directive is in danger of being shelved?
I’m not sure there has been much of an influence regarding transparency and reporting, which have mostly been impacting domestic companies. The multinationals that operate here would’ve already been doing a lot of the work around governance and transparency, because their headquarters would force them to. It’s new ground for a lot of the domestic companies.
In a lot of ways it’s just the domestic companies working for themselves in this very, I hate to use the word parochial, but I don’t know of a better term to phrase it. So I wouldn’t think that much from the international community has influenced this movement. It’s just been a very happy coincidence that this has happened here along with a lot of what’s happening in Europe as well as what’s happening across certain markets in Southeast Asia.
Are companies still making the same sort of mistakes in their communications as they were a few years ago before these regulations got tougher?
Absolutely they are. There are mistakes happening left, right, and centre, which is why so many companies are finding themselves in the firing line.
The main thing for companies to remember is that no one is expecting you to be perfect. They just don’t want to be lied to. And I think that’s the core of the message when it comes to avoiding greenwashing.
What’s happened here, though, is because for the past few years there has been such a push to be compliant with regulation and ticking the boxes and doing all of the right things towards transparency, governance, and reporting, which is absolutely critical.What’s been lost is the actual messaging.
Because at the end of the day, greenwashing is not about your intent. Greenwashing happens when there is a misunderstanding or misinterpretation by the consumer, by the audience. But we’ve forgotten the audience. We’ve forgotten to focus on the messaging. So what I’m trying to do now is help companies understand how they marry regulatory compliance with effective communications so that consumers feel like they are actually being told the truth.
The other complicating issue here is because there has been so much scrutiny of companies by consumers, there has been a massive uptick in greenhushing, which is when companies keep quiet instead of talking about the good things they are doing, because they are worried activists and the public are just going to critique everything they are doing and find mistakes – which of course you will. You are always going to find a mistake.
So companies now are keeping quiet, which is the exact opposite thing we need. We want companies talking more openly and loudly about the great things they’re doing. But also talking about the barriers to progress and what they are doing to try to overcome them.
Why aren’t more companies being vulnerable about their sustainability missteps?
A good exampl well-known billionaire running a software company that is one of the new poster children of sustainability. But they were taken to task for sponsoring the Williams F1 racing team not so long ago.
And he got out in front of it and he posted saying: “Hey, I get why you might think this is totally against our ethos and what we’re trying to do, but let me explain to you why we made this decision.”
He went into detail about F1, what they are doing to green and go net zero. But then he went a few steps further to talk about his own life and how, as a billionaire, it probably seems antithetical to building a more sustainable future, but again, not perfect and certainly worth the scrutiny, but at least that’s one example of somebody trying to be open, honest, and a little bit more vulnerable with the general public.
Often there is an internal battle between the marketing department that wants to promote and the sustainability department that just wants to be transparent about where they are. And that’s often where the problems arise, right?
Absolutely. I call it radical transparency. I don’t think I coined that term. But anytime I talk about radical transparency, I can see people just clench up and they clutch their pearls, especially when you are talking to some of the teams you mentioned like legal, HR, compliance. Oh my God, how could we ever do that?
There’s no way we are going to put all our cards on our table. So it’s a very slow process, but I think it’s one that is absolutely critical for companies trying to do the right thing, because consumers are not letting up on holding companies to task. So the best thing you can do if you don’t want activists coming after you, if you don’t want those “gotcha” moments, then put your cards on the table. If anything, it’s from a risk avoidance perspective, the best remedy to any potential issues.
So what’s next in the context of greenwashing in Australia?
It’s a very interesting question at a very interesting time. We are in this holding pattern right now over the next couple of months as the decision on who is going to host cop. I think it’s between Adelaide or Istanbul. We are waiting for that decision and whether or not that’s going to push the government to be better. At the same time that is happening, the government is also supposed to be releasing their 2035 climate targets over the next month. We are waiting for that announcement to happen as well.
So it’s this very strange grey zone that we are in, this waiting period. So to answer your question, where’s the government going? Ask me in a few weeks and I’ll have a definitive answer.
This transcript has been edited for brevity and clarity
