If you run a climate-tech startup, your environmental claim isn’t a marketing flourish — it is the product. “We remove X tonnes of CO₂”, “our packaging is compostable”, “switching to us cuts your emissions by 40%”. Consumer startups lean on the same language because sustainability sells, and buyers pay a premium for it. That premium is exactly why the ACCC treats greenwashing as a fair trading problem, not an environmental one: a false green claim extracts money from consumers and steals customers from competitors whose claims are real. Environmental claims have been on the ACCC’s compliance and enforcement priorities every year since 2022, and the regulator has confirmed the focus continues into 2026–27. The cases are no longer warning shots.
The Legal Framework: Two Sections, One Very Large Number
Greenwashing isn’t a standalone offence. It’s enforced through the general prohibitions in the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)):
- Section 18 prohibits misleading or deceptive conduct in trade or commerce. It carries no pecuniary penalty, but it grounds injunctions, corrective advertising orders and — importantly — private damages claims by competitors and customers.
- Section 29 prohibits false or misleading representations about goods or services, including about their standard, quality, composition or approval. This is the penalty provision, and since the Treasury Laws Amendment (Doubling Penalties for ACCC Enforcement) Act 2026 (Cth) commenced on 28 March 2026, maximum penalties for companies are the greater of $100 million per contravention, three times the benefit obtained, or 30% of adjusted turnover during the breach period — with up to $2.5 million for individuals involved. (The doubled cap applies to conduct from commencement; earlier conduct remains subject to the previous $50 million first limb.)
- Section 4 is the sleeper provision for climate-tech: any representation about a future matter — “net zero by 2030”, “fully recyclable by next year”, “renewable within a generation” — is taken to be misleading unless you had reasonable grounds for making it when you made it. The evidential burden of pointing to those grounds sits with you.
The test throughout is the overall impression created for the ordinary consumer. Intentions are irrelevant: an honestly held but unsubstantiated green belief misleads just as effectively as a cynical one. (One boundary note: green claims about financial products — ESG funds, superannuation, green bonds — belong to ASIC under the ASIC Act’s mirror provisions, and ASIC has extracted eight-figure penalties from Mercer, Vanguard and Active Super. Fintech and fund-adjacent founders answer to both regulators.)
What Enforcement Actually Looks Like
Three recent matters map the risk surface for startups better than any guidance document.
Composition claims — ACCC v Clorox. In April 2025 the Federal Court ordered Clorox Australia to pay $8.25 million in penalties for marketing GLAD bags as “50% ocean plastic” when the plastic was collected from communities in Indonesia up to 50 kilometres inland from a shoreline. The plastic was real, the recycling was real — the description overreached. If your hardware is “made from recycled materials” or your packaging is “compostable”, the claim must match the supply chain you can actually evidence, not the one in your pitch deck.
Future and transition claims — ACCC v Australian Gas Networks. The ACCC’s proceedings against AGN, filed in June 2025 and ongoing, allege its “Love Gas” ads misled consumers by representing that the gas in its network would be renewable within a generation, without reasonable grounds given significant technical and economic barriers. Read that allegation again as a climate-tech founder: it describes a decarbonisation roadmap presented as a settled fact. Aspirational claims aren’t banned — but an unqualified promise about future environmental performance needs a credible, documented pathway behind it on the day the ad runs.
Impact and donation claims — ACCC v Grill’d. In June 2026 the ACCC sued Grill’d over its “Tree Day Tuesday” campaign, alleging customers were told $1 from every Tuesday burger funded tree planting when conditions the ACCC says were not adequately disclosed meant only around 4% of more than five million Tuesday purchases actually qualified. Every “1% for the planet”-style mechanic, tree-per-signup pledge or impact counter on a startup’s website is a representation the ACCC can audit against your actual remittances.
And the regulator isn’t the only plaintiff. EnergyAustralia’s “Go Neutral” product ended in a 2025 settlement with advocacy group Parents for Climate, a public apology to more than 400,000 customers, and the product being closed to new customers and phased out — private ACL litigation, not ACCC action.
The Eight Principles, Compressed for Founders
The ACCC’s guidance, A guide to making environmental claims for business, sets out eight principles. In practice they collapse into four disciplines:
- Substantiate before you publish. Every claim needs contemporaneous evidence — test reports, supplier certifications, lifecycle analyses — held in a file you could hand to a regulator. “Our supplier told us” did not save Clorox.
- Qualify honestly. Conditions that materially change the claim go next to the claim, not in a footnote. “Carbon neutral (scope 1 and 2, via offsets)” and “carbon neutral” are different representations.
- Avoid broad, absolute language. “Green”, “eco-friendly”, “sustainable” and “environmentally safe” are almost impossible to substantiate. Specific, measurable claims are both more defensible and more persuasive.
- Mind the visuals. Green colour schemes, leaves, and earth imagery form part of the overall impression — the ACCC assesses the ad, not just the sentence.
The Carbon Neutral Problem
Founders who built marketing on Climate Active certification need a transition plan: the government has confirmed the scheme is closing, with certification expected to cease by mid-2027 following a 2026 consultation, taking the trade mark and the government-backed “carbon neutral” badge with it. Offset-based neutrality claims were already the most contested category of green marketing — EnergyAustralia’s apology conceded that offsets “do not prevent or undo the harms” of emissions. If your neutrality claim depends on offsets, say so expressly; better, shift the marketing to what you actually reduce.
What to Do Before the ACCC (or a Competitor) Reads Your Website
Run a claims audit now: list every environmental representation across your site, packaging, decks and social channels, and match each to its evidence. Kill or qualify anything you can’t substantiate. Put roadmap claims through the section 4 filter — board-approved plan, costed pathway, or rewrite. Check that impact mechanics pay out the way the copy promises. And build the substantiation file into your product cycle, because investors increasingly run greenwashing checks in due diligence — the same claims that attract customers attract underwriters of your next round, and the penalty regime they’re pricing is, for conduct from March 2026 onwards, anchored at $100 million.
This article is general information only, not legal advice — whether a particular claim misleads turns on its overall impression in context, and whether you have “reasonable grounds” for a future claim is a question of evidence. Viridian Lawyers advises Australian climate-tech and consumer startups on consumer law, marketing review and capital raising. If your growth engine runs on green claims, get in touch before the regulator or a competitor tests them for you.
