Greenwashing is getting expensive. Here’s what to check.
Greenwashing has moved well beyond being an awkward reputational issue for sustainability and marketing teams. Across Australia, regulators have been pursuing misleading wording and marketing through the courts, with penalties now large enough to get the attention of boards.
In 2024 and 2025, Mercer, Vanguard and Active Super were ordered to pay a combined A$34.7 million in ASIC's first three greenwashing court outcomes. In April 2025, Clorox Australia was ordered to pay another A$8.25 million after GLAD bags were marketed as containing “50% Ocean Plastic”, when the recycled plastic had actually been collected from communities in Indonesia, in some cases up to 50 kilometres from the coast.
The enforcement is continuing. In August 2026, Fiducian Investment Management Services was ordered to pay A$7.3 million after a court found, among other things, that it had made statements liable to mislead the public about the ethical or socially responsible objectives of an investment fund.
New Zealand has not yet seen environmental cases producing penalties on that scale, but the Fair Trading Amendment Bill introduced in May 2026 proposes substantially higher penalties for serious breaches of the Fair Trading Act, including a maximum for some corporate contraventions of the greatest of NZ$5 million, three times the gain made or loss avoided, or the consideration for the relevant transaction. Those changes are proposed rather than current law, but they show the direction of travel.
For organisations genuinely trying to improve their environmental performance, the response doesn't need to be silence or increasingly nervous communications. It is much more useful to make sure there is a clear connection between the work you have actually done, the evidence behind it and what you eventually say about it.
The risk is wider than simply saying something false
Lawyers for Climate Action NZ has recently released A Greenwashing Guide for Charities, Aotearoa New Zealand's first guide specifically addressing greenwashing for charities. Although written for the charitable sector, many of the issues it raises apply just as readily to businesses.
The guide explains that greenwashing can involve environmental information that is vague, false, misleading or unsubstantiated. It can also be implied: words such as “green” or “eco”, alongside forests, leaves, mountains, colours, logos or other visual cues, can contribute to the overall impression people take away.
That is consistent with the Commerce Commission's own guidance, which asks businesses to consider what a reasonable consumer is likely to understand. Intention is not the test, and fine print cannot necessarily repair an overall impression that is misleading.
That distinction is important because most organisations aren't deliberately inventing environmental stories. More often, real work has been done — emissions measured, suppliers changed, products redesigned, efficiency improved or reduction programmes established and somebody understandably wants to communicate it.
The problems often appear between the technical work and the final wording.
A result relating to one part of a footprint starts sounding like a statement about the whole organisation. A reduction against a particular baseline loses the baseline when it reaches the website. A future commitment begins to read like something already achieved. A supplier's environmental description gets repeated without anybody understanding how it was calculated. A business calls itself net zero on the strength of an organisational certification that leaves material Scope 3 emissions out of the calculation.
Good intentions don't make those distinctions disappear.
Before you say it, here are five things we would check
There isn't one template that works for every environmental statement. The evidence needed for a product, an organisation, a building or an investment can be quite different. But there are five fairly consistent questions worth asking before significant sustainability information goes into a website, tender, annual report, product description, investor document or campaign.
1. What have you actually measured and does the scope match what you're saying?
Start with the work, not the wording.
For greenhouse gas emissions, be clear about the entity or product assessed, the reporting period, the emission sources included and the accounting methodology used. For an organisational inventory, understand the Scope 1, 2 and 3 boundary and any exclusions. For a product footprint or life-cycle assessment, make sure the system boundary, functional unit, data sources and assumptions are appropriate to the conclusion being drawn.
The same principle applies to recycled content, biodiversity, water, waste and other environmental impacts: be precise about what the underlying evidence demonstrates.
A narrow assessment can be completely legitimate. The problem begins when a narrow result is communicated in a way that sounds much broader.
An organisation may, for example, have accurately measured and verified Scope 1 and 2 emissions while significant emissions remain elsewhere in its value chain. Reporting the Scope 1 and 2 result is not inherently a problem, provided that boundary remains clear when it is communicated.
The same applies to certification. Lever Room offers different pathways, including certification specifically defined around Net Zero Scope 1 & 2, as well as pathways taking a wider value-chain view. The boundary is part of what is being communicated, rather than something to hide in the methodology.
In practice, we would keep distinctions clear between:
Scope 1 and 2 versus Scope 1, 2 and 3;
a complete assessment versus selected categories or activities;
gross emissions versus a position after mitigation;
an absolute reduction versus an intensity improvement;
current performance versus a future target; and
the whole product or organisation versus one component of it.
The same applies beyond carbon. Where an environmental benefit relates only to part of a product, that should be clear rather than allowing people to infer that the benefit applies to the whole thing.
A useful test is: if somebody asked us to show them exactly how we know this, could we do it?
That is a better starting point than deciding what you would like to say and then working backwards to find evidence for it.
2. What impression will people actually take away?
Sustainability and carbon information is rarely communicated as plain text. Headlines, photographs, diagrams, certification marks, colours, illustrations and supporting language all contribute to what people think they are being told.
The Commerce Commission is explicit that implied representations and overall impression count. Fine print should not be relied upon to correct a misleading headline; if significant qualification is needed, the headline itself may need reconsidering.
Lawyers for Climate Action NZ makes the same point: wording, imagery, colours, logos and information left out can all contribute to whether something is misleading.
Once the technical information has been checked, somebody should therefore look at the finished communication as a customer would. What would you think it meant if you weren't familiar with the methodology sitting behind it?
That question can be more revealing than another round of proofreading.
3. Can you substantiate it — including anything you've relied on from suppliers?
Under the Fair Trading Act, the issue with an unsubstantiated representation is whether there were reasonable grounds for it at the time it was made. Finding supporting material later is not the same as having a reasonable basis when the information was communicated.
For anything material, the underlying evidence should therefore be identifiable and retrievable rather than sitting mainly in somebody's memory or inbox.
Depending on what is being communicated, that may include:
the inventory, LCA or other technical assessment;
the standard or methodology followed;
calculations and source data;
emission factors or other datasets;
assumptions, exclusions and limitations;
evidence supplied by third parties;
assurance or verification reports; and
a clear description of what the result covers.
This is becoming more important as environmental information moves through supply chains. Lawyers for Climate Action NZ describes the risk of “second-hand” greenwashing: one organisation provides environmental information and another repeats it to its own customers. Simply repeating what a supplier has provided does not automatically remove the downstream risk.
Organisations increasingly receive supplier-specific carbon data, environmental product declarations, certification marks, recycled-content information and other sustainability data through procurement and Scope 3 measurement. Better supplier data can improve decision-making considerably, but “supplied by the manufacturer” and “independently verified” are not the same thing.
Before relying heavily on somebody else's information, understand:
what was measured;
the period and boundary it relates to;
how it was calculated;
whether it has been independently reviewed;
what qualifications or limitations apply; and
whether you are using it for the purpose for which it was produced.
The responsibility also runs in the other direction. If customers are likely to repeat information about your environmental performance, clear approved wording and sufficient context can help prevent a carefully qualified technical result becoming something much broader further down the chain.
None of this requires an enormous compliance exercise around every sentence. The evidence should be proportionate to what is being said. A specific environmental proposition used widely in sales or marketing deserves more scrutiny than a modest description of an internal initiative.
4. If there is assurance or certification, what exactly has been checked?
Certification can be genuinely useful, but the existence of a badge is not enough on its own.
The Commerce Commission recognises that rigorous independent certification schemes can give consumers confidence, while also warning that environmental logos can mislead if they create an unjustified impression of independent certification.
The value of certification therefore comes from what sits behind the graphic: the boundary assessed, the criteria that had to be met, the standard or methodology used, the evidence reviewed and the independent scrutiny undertaken.
Lever Room's certification programme is built around defined certification pathways and recognised greenhouse gas standards. Independent third-party assurance is required before certification is issued, with ongoing surveillance across the certification cycle. Different certification names deliberately communicate different boundaries rather than presenting every pathway as the same environmental position.
The discipline doesn't end when the mark is issued. Website copy, customer communications and other wording still need to describe accurately what has been certified.
A certification mark should make something complicated easier to communicate; it shouldn't make something narrow look broader than it is.
5. Is it still true today?
Environmental information has a shelf life. Suppliers change, product formulations change, organisational boundaries move, calculation methods and emission factors are updated, better data becomes available and targets reach their dates.
Something that was accurate when a website was written two years ago can become inaccurate without anybody deliberately changing it.
Environmental communications therefore need periodic review rather than being treated as permanent copy. This is particularly relevant to certification and assurance programmes, where annual measurement and surveillance create natural opportunities to check whether what an organisation continues to say still reflects the current evidence and certification scope.
A useful final test is: if we said this again today, would we still be comfortable supporting every part of it?
Good sustainability work should become easier to talk about, not harder
There is a risk that increasing scrutiny produces the wrong response: organisations doing substantial work become frightened of talking about it, while less careful businesses continue making broad statements anyway.
Customers, procurement teams, investors and boards increasingly need credible environmental information. Organisations that are measuring impacts properly, making reductions and investing in better performance should be able to explain that work clearly and confidently.
The discipline is in keeping the technical evidence and the public story connected. You should be able to trace a clear path from what was assessed, through the boundary and methodology, to the underlying evidence and independent scrutiny, and finally to what is being communicated.
When those pieces line up, good communications become easier because you know exactly what you can stand behind. When they don't, changing the wording is unlikely to fix the underlying problem.
The new Greenwashing Guide for Charities from Lawyers for Climate Action NZ is a useful addition to this conversation, particularly its treatment of substantiation, overall impression and environmental information travelling through value chains. It sits alongside the Commerce Commission's existing guidance for businesses, which is clear that environmental information should be truthful, accurate and capable of being substantiated.
For organisations doing genuine environmental work, the answer isn't to retreat into vague language or stop talking about progress. It is to know exactly what sits underneath what you say, make the boundaries clear and build enough evidence and scrutiny around important statements that you can communicate them confidently.
Because if the work is real, you should be able to show it.
This article is general commentary and is not legal advice. Organisations seeking advice on a particular environmental statement or its application under the Fair Trading Act should obtain appropriate legal advice.