Environmental claims can be a potent marketing tool for business, with “green” products often commanding significant premiums.
However, sometimes these claims may not be based on science but only be in the nature of “green marketing”.
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When it may be the latter, such claims are likely to attract the attention of the Australian Competition and Consumer Commission (ACCC).
In recent proceedings brought by the ACCC against Woolworths (Australian Competition and Consumer Commission v Woolworths Group Limited  FCAFC 162) the debate centred on the environmental claim that a retail product was “biodegradable and compostable”.
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What did that mean? Was it simply a claim that the products were capable of biodegrading and composting.
Or was it also a representation about the future: that the product would degrade and compost within a reasonable time?
While some consumers may expect the latter.The Full Federal Court found that the claim “biodegradable and compostable” in this instance extended only to a representation regarding the inherent properties of the products – that is, that the products were capable of biodegrading and decomposing.
Organisations making similar environmental claims in relation to their products should take a level of comfort from this decision.
But should still ensure that any claims of a similar kind can be substantiated.
It may also create an opportunity for those brands whose products do biodegrade or compost more readily to differentiate themselves.
Inherent characteristic or representation about a future matter?
The products in question were a range of disposable cutlery and crockery sold under the Woolworths’ “Select Eco” brand.
The products were made of non-toxic organic materials and the packaging featured a prominent statement “Biodegradable and Compostable” along with the statement “Made from a renewable resource”.
In the context of environmental claims, “biodegradable and compostable” is a “lifecycle” claim, which concerns the composition, production or disposal of a good or its packaging. More specifically, this would generally be considered a claim relating to disposal of the good.