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What is Greenwashing and Why Can It Lead to ACCC Fines?

Greenwashing occurs when a company makes environmental or sustainability claims that are false, misleading, exaggerated, or omit important information. The term refers to marketing that makes a business appear more environmentally responsible than it actually is. According to the Australian Competition and Consumer Commission (ACCC), businesses must ensure environmental claims are truthful, accurate, and supported by evidence. Misleading consumers can breach the Australian Consumer Law.  


Consumers are increasingly choosing brands based on sustainability values. When a company overstates its environmental impact, consumers may spend money based on information that isn’t accurate. This is why the ACCC has made greenwashing a major enforcement priority.  




Grill’d: A Recent Example

In June 2026, the ACCC commenced Federal Court proceedings against Grill’d over its “Tree Day Tuesday” promotion. Grill’d advertised that it would donate $1 from every burger purchased on a Tuesday to support tree planting initiatives. However, the ACCC alleges that only around 4% of more than 5 million Tuesday burger purchases actually qualified for a donation because of conditions that were not adequately disclosed to customers.  

According to the ACCC, customers had to:

  • Be members of Grill’d’s loyalty program.

  • Dine in rather than order takeaway.

  • Order at the front counter.

  • Avoid ordering through QR codes or certain promotions.

The ACCC alleges that these restrictions were either not disclosed or not adequately disclosed in the advertising, creating the impression that every Tuesday burger purchase contributed to tree planting when most did not. The ACCC described this as a form of greenwashing.  


Why This Creates Legal Risk

Under Australian Consumer Law, businesses cannot engage in misleading or deceptive conduct. Even if a company has positive intentions or genuinely supports environmental causes, it can still breach the law if its advertising creates a false overall impression.  

The ACCC is seeking penalties and other orders against Grill’d because it believes consumers may have been influenced to purchase products based on environmental claims that did not accurately reflect the reality of the promotion.  



Key Lesson for Businesses

If a business wants to promote environmental initiatives, it should:

  • Make claims that are specific and evidence-based.

  • Clearly disclose any conditions or limitations.

  • Avoid vague terms such as “eco-friendly” or “green” unless they can be substantiated.

  • Ensure the overall message is not misleading, even if technically accurate.  

In the ACCC’s view, consumers deserve clear and honest information about environmental claims. Businesses that exaggerate sustainability efforts risk reputational damage, regulatory action, and significant financial penalties.  


Nudge Takeaway

Greenwashing isn’t just a marketing mistake - it’s a legal risk. The Grill’d case highlights that companies must ensure environmental promises match reality. In an era where consumers actively support sustainable brands, transparency is no longer optional; it’s essential.



 
 
 

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