Greenwashing, Greenwishing & Greenhushing
- Feb 24
- 8 min read
Greenwashing, Greenwishing and Greenhushing: Legal Risks, Enforcement Trends and Implications for Tasmanian Practitioners
Originally posted at https://www.lst.org.au/greenwashing-greenwishing-and-greenhushing-legal-risks-enforcement-trends-and-implications-for-tasmanian-practitioners/
Environmental, social and governance (ESG) expectations are now embedded in Australian consumer behaviour, regulatory priorities and corporate practice. For legal practitioners, whether advising businesses, government agencies, or boards, competence in this area has become essential. Over the past three years, the ACCC and ASIC have sharply escalated enforcement activity targeting misleading environmental claims, culminating in substantial penalties, detailed judicial guidance, and a clearer framework for assessing risk.
This article synthesises the emerging terminology, regulatory landscape and recent case law, then turns to the practical implications for Tasmanian clients. With mandatory climate-related financial disclosures commencing and supply-chain-driven ESG obligations accelerating, practitioners will increasingly be required to interrogate environmental representations, test internal governance, and guide clients navigating this fast-moving landscape.
Understanding the Terminology: Greenwashing and Its Emerging OffshootsGreenwashing – the umbrella concept
“Greenwashing” is now widely understood as conduct where a business presents itself, its products, or its operations as more environmentally sustainable than they genuinely are. It involves either overstating the environmental benefits of an activity or product, or implying compliance with sustainability expectations that do not exist. It is an overarching term, under which two more recently-recognised behaviours sit: greenwishing and greenhushing.
Greenwishing – aspirational claims without the substance
Greenwishing describes situations where a business makes ambitious, well-intentioned, often forward-looking sustainability commitments such as net-zero targets, recycled content claims, circular-economy statements, but lacks the capability, planning, data or expertise to actually deliver them. This is increasingly relevant for lawyers reviewing sustainability strategies, marketing collateral, investor disclosures and public statements. The key risk is not that the client intends to mislead, but that they fail to undertake the necessary due diligence to validate a future claim.
Given Tasmania’s emerging ESG ecosystem and relatively small pool of technical experts, practitioners must be alert to whether the external advice underpinning a claim is sufficiently robust. The regulatory expectation is now clear: future-looking environmental statements must be reasonably based, evidence-supported and achievable.
Greenhushing – omitting information out of fear
Greenhushing involves under-disclosure of relevant ESG information, often to avoid scrutiny or criticism. Businesses may deliberately downplay climate risks, supply-chain vulnerabilities, or environmental shortcomings.
Regulators have made it clear that silence can mislead. A failure to correct an impression, or the omission of material ESG information, may amount to misleading or deceptive conduct. Disclosures must reflect the “bad news” as well as the good; postponing the inevitable only worsens the regulatory consequences.
The Regulatory Architecture: ASIC and the ACCC
Environmental claims are regulated not by new climate-specific statutes, but by long-established misleading and deceptive conduct principles. Both regulators have emphasised that the legal issues are not novel. The conduct simply occurs in a new context.
ASIC – Financial Services and Investment Products
ASIC’s primary focus is on sustainability claims in financial products and services. Its enforcement relies on:
ASIC Act s12DA (misleading or deceptive conduct); and
The Corporations Act, including new climate-related financial disclosure obligations.
Since 2022, ASIC has declared greenwashing an enforcement priority. Its actions against Vanguard, Mercer and Active Super demonstrate a willingness to pursue large funds for inconsistent application of ESG screening criteria and inaccurate sustainability disclosures.
ACCC – Consumer Markets and General Commercial Conduct
The ACCC’s focus is broader, centred on Australian Consumer Law (ACL), including:
s18 – Misleading or deceptive conduct.
s29 – False or misleading representations.
s33 – Conduct liable to mislead the public about environmental benefits.
The ACCC first named greenwashing as an enforcement priority in 2022 and has extended that priority to at least 2026. Its stance is expansive: any claim that makes a product “seem better or less harmful for the environment than it really is” may attract scrutiny.
In 2023, the ACCC conducted a nationwide internet sweep of environmental claims. Concerningly, 57% of reviewed claims raised issues, typically vague terminology, lack of substantiation, future commitments with no plan (“greenwishing”), and misuse of third-party certification symbols. This sweep laid the groundwork for the prosecutions that followed.
Why This Area Is a Regulatory Priority: The Market Drivers
The enforcement push is not occurring in a vacuum. Market research shows that environmental representations significantly influence consumer behaviour. Consumer willingness to pay: PwC’s Voice of the Consumer1 survey reports:
80% of consumers are willing to pay more for sustainably produced or sourced goods.
Purchase decisions are influenced by:
Production methods.
Recyclability of the product and its materials.
Eco-friendly packaging.
Positive impacts on biodiversity and water.
Brand loyalty and disengagement: Oracle’s global survey2 found:
70% of consumers would discontinue their relationship with a brand that fails to take sustainability seriously.
Talent acquisition and retention: Environmental commitments influence staff mobility:
69% of employees would leave an employer for one with stronger sustainability performance.
For corporate clients, therefore, the risks of greenwashing extend well beyond fines: reputational damage, investor flight, loss of consumer trust, and talent attrition can have long-lasting impacts.
ACCC v Clorox Australia Pty Ltd [2025] FCA 357 – $8.25M penalty
The ACCC’s 2024 proceedings against Clorox (the manufacturer of Glad products) have become the most recent reference point in this area. The $8.25 million penalty confirms the regulator’s willingness to impose significant fines and to treat each product sold, which may number in the millions, as a separate contravention.
Facts
In 2021, Glad launched a “Glad to Be Green” range, prominently labelled as containing:
“50% ocean plastic”; and
Later, “50% ocean-bound plastic”.
The marketing team identified sustainability as a commercial opportunity and a point of product differentiation. However, investigation revealed:
The plastic content was sourced not from the ocean, but from communities up to 50 km inland; and
The remaining component was conventional virgin plastic resin.
Findings
The court held that:
The primary claim (“50% ocean plastic”) was false;
Smaller qualifying text on the packaging was not sufficient to correct the misleading headline representation;
The conduct breached ACL ss 18, 29 and 33; and
Each supply, display or sale constituted a separate breach.
Penalty Considerations
Justice Neskovcin identified numerous aggravating factors:
More than 2.2 million units sold over two years.
Products priced higher than comparable non-“green” alternatives.
Senior management awareness of potential inaccuracies prior to launch.
Market detriment, including consumers losing opportunities to buy genuinely sustainable alternatives.
The need for deterrence beyond a mere “cost of doing business”.
The final orders included the monetary penalty, a three-year compliance program, injunctions, corrective advertising, and costs.
Notably, this decision synthesised principles across ACCC and ASIC jurisprudence, confirming a consistent judicial approach to environmental representations.
ASIC’s Recent Cases: Vanguard, Mercer and Active Super
While the factual scenarios differ, the ASIC greenwashing cases reinforce several common themes: inconsistent ESG screening, inaccurate disclosures, and internal governance failures.
ASIC v Vanguard Investments Australia Ltd [2024] FCA 308$12.9M penalty
Vanguard promoted a fund portfolio as incorporating ethically conscious screening against ESG criteria. However 46% of securities had not been screened, representing 74% of the fund’s market value.
Although initially well-intentioned, Vanguard lacked the internal systems, resourcing and processes to apply the screening consistently. ASIC’s litigation emphasised that good intentions are irrelevant. What matters is whether the representation is true at all times.
ASIC V Mercer Superannuation (Australia) Limited 2024 [FCA] 850$11.3M penalty
Mercer promoted “Sustainable Plus” options excluding carbon-intensive, alcohol and gambling investments. ASIC found the following had in fact been included:
19 gambling-related companies;
15 alcohol-related companies; and
15 fossil-fuel aligned companies.
Again, the governance systems did not align with the public claims. Mercer ultimately agreed to pay ASIC’s costs in full.
ASIC v LGSS PTY LTD (Active Super) (No 3) [2025] FCA 205 – $10.5M penalty
Active Super claimed to exclude gambling, fossil fuels, coal and Russian investments. The ACCC (using publicly available annual reports) discovered direct and indirect holdings in:
SkyCity Entertainment
Gazprom
Shell
Whitehaven Coal
Justice Kennett held that Active Super’s misleading conduct enhanced its reputation unfairly and deprived consumers of the opportunity to invest according to their values. Aggravating factors included a two-and-a-half-year duration and contrived defensive arguments.
Implications for Tasmanian Practitioners – Mandatory Climate-Related Financial Disclosures
From 1 January 2025, amendments to the Corporations Act introduced mandatory climate-related financial disclosures aligned with the Australian Sustainability Reporting Standards (ASRS), themselves based on long established international Taskforce on Climate-related Financial Disclosures (TCFD) principles. The recent changes require entities comply with annual reporting requirements. The rollout will be a phased approach, broken into three groups:
Group 1 – Applies from July 2025 and captures entities meeting two of the following criteria :
≥ $500m revenue; or
≥ $1Bn assets; or
≥ 500 employees.
Group 2 – Applies from 1 July 2026 and captures entities meeting two of the following criteria :
≥ $200m revenue; or
≥ $500m assets; or
≥ 250 employees.
Group 3 – Applies from 1 July 2027 and captures entities meeting two of the following criteria:
≥ $50m revenue.
≥ $25m assets.
≥ 100 employees.
Noting few Tasmanian-headquartered businesses fall into Group 1 of Group 2 it is anticipated Group 3 will encompass a significant number of Tasmanian organisations. Practitioners will be called upon to interpret reporting standards, vet disclosures, and identify risks of misrepresentation.
Practical Tasks for Lawyers
Lawyers will increasingly be required to:
Review environmental claims in marketing, procurement, contracts, investor materials and sustainability reports.
Assess substantiation, including data sources, methodologies and technical expert input.
Evaluate governance frameworks, such as ESG screening processes, product approval workflows and disclosure controls.
Test forward-looking statements (e.g., net-zero pathways) for reasonable basis.
Assist in developing eco-credential frameworks, including approved claim registers.
Draft and review supplier codes of conduct, ensuring alignment with client ESG commitments.
Advise on compliance programs following enforcement action or voluntary assurance reviews.
For in-house counsel, a particularly effective tool is an approved claims database, enabling marketing and sales teams to use pre-vetted statements rather than creating new wording that requires ad hoc review.
Supply Chain, Procurement and Global Market Expectations
Tasmania’s large export market means many local businesses will soon encounter ESG requirements not only domestically but from international customers, particularly in the EU, UK, North America and parts of Asia.
Mandatory sustainability criteria in procurement processes are increasingly common. Large buyers expect suppliers to:
Disclose emissions;
Meet recycled-content thresholds;
Provide evidence of circular-economy practices; and
Adhere to detailed codes of conduct.
For some Tasmanian exporters, the opportunity is significant: Tasmania’s predominantly renewable electricity profile gives local manufacturers and producers a competitive advantage. However, many are not yet articulating that advantage effectively.
Examples of Authentic Claims: Learning from the Market
Authenticity and accuracy consistently outperform exaggerated or unrealistic claims. The two examples below illustrate this.
Who Gives A Crap
The company uses clear, modest, easily substantiated claims:
100% recycled paper.
Plastic-free packaging.
50% of profits donated to sanitation charities.
Its success shows that consumers respond to truth and transparency, not hyperbole.
Patagonia and IKEA
Both companies demonstrate:
Strong supplier codes of conduct.
Transparent reporting.
Verifiable sustainability criteria.
Consistent application across product lines.
These models provide helpful benchmarks for clients developing ESG frameworks.
Key Takeaways for Legal Practitioners
Environmental claims are legal representations so treat them as seriously as financial disclosures.
Future statements require evidence, planning and capability, not aspirational language.
Frameworks must be applied systematically, not selectively.
Silence can mislead. Greenhushing poses regulatory risk.
Each sale may be a separate breach, exponentially increasing penalty exposure.
Directors and senior executives are expected to engage, not merely endorse ESG claims.
Supply-chain obligations are spreading, and Tasmanian exporters must prepare now.
Mandatory climate disclosures will affect many Tasmanian entities from 2027.
Legal advisers play a central coordinating role across technical experts, marketing teams, procurement and boards.
Conclusion
Greenwashing enforcement is now entrenched as a regulatory priority for both ASIC and the ACCC, supported by strong judicial endorsement and rising public expectations. The legal principles are familiar – misleading and deceptive conduct – but their application in the ESG context presents new complexities for businesses and their advisers.
For Tasmanian practitioners, the next three years will bring increasing demand for ESG legal advice, driven by mandatory climate-related disclosures, supply-chain pressures and heightened consumer scrutiny. Lawyers who understand this terrain, its terminology, its case law, and its practical governance challenges, will be uniquely positioned to guide clients safely and strategically through the rapidly evolving environmental claims landscape.
Price Waterhouse Cooper, 15 May 2024, Press Release: Consumers willing to pay 9.7% sustainability premium, even as cost-of-living and inflationary concerns weigh: PwC 2024 Voice of the Consumer Survey, https://www.pwc.com/gx/en/news-room/press-releases/2024/pwc-2024-voice-of-consumer-survey.html
Oracle + Savanta, 2022, 2022 ESG Global Study, No Planet B: How Can Businesses and Technology Help Save the World? p14, https://www.oracle.com/a/ocom/docs/applications/esg-study-no-planet-b-report.pdf
December 2025
Kym McCarthy
Principal & DirectorAudacieux Legal & Consulting