In proceedings taken by the Australian Competition and Consumer Commission, the Federal Court has declared that GM Holden Ltd made false and misleading claims in its "Grrrrrreen" campaign which promoted the environmentally friendly nature of its Saab range of vehicles.
Between 27 July and 1 September 2007, GM Holden, trading as Saab Australia, published newspaper and magazine advertisements across Australia promoting the Saab range of motor vehicles. The advertisements, under the headline statement "Grrrrrreen", contained the words and phrases, "Grrrrrreen", "Every Saab is green. With carbon emissions neutral across the entire Saab range" and "Shift to Neutral".
In the advertisements GM Holden represented that it had taken measures so that the carbon dioxide emissions from any Saab motor vehicle would be neutral over the life of that motor vehicle.
In the same advertisements, GM Holden also represented that in the first year following the purchase of a Saab motor vehicle, GM Holden would plant, on behalf of the purchaser, 17 native trees which would offset the carbon dioxide emissions for the life of that motor vehicle.
These claims were misleading. The carbon dioxide emissions from any Saab motor vehicle would not be neutral over the life of that motor vehicle, and the planting of 17 native trees would only provide a carbon dioxide emission offset for a single year's operation of the motor vehicle.
By consent, the Federal Court declared today that GM Holden contravened sections 52 and 53(c) of the Trade Practices Act 1974 by engaging in misleading conduct. The court also ordered GM Holden to pay the ACCC's costs.
The ACCC has also accepted court enforceable undertakings from GM Holden whereby GM Holden has undertaken to:
- refrain from republishing the advertisements
- retrain all its Saab marketing staff in relation to misleading and deceptive conduct in the context of 'green' marketing claims to make them aware of their responsibilities under the Act, and
- have the training reviewed by an independent third party and have the reviewer provide a report to the ACCC about the training.
In addition, GM Holden has advised the ACCC that it will plant 12,500 native trees which it believes will be a sufficient number of trees to offset the carbon dioxide emissions for the life of all of the Saab motor vehicles sold during the campaign.
In welcoming the court decision and GM Holden's decision to plant the additional trees, ACCC Chairman, Mr Graeme Samuel noted GM Holden's cooperation to conclude the proceedings.
"The court outcome is a salutary warning that companies need to give a lot more thought to the type and nature of green claims they make about their operations, products or services.
"Vague, unsubstantiated, misleading, false or deceptive environmental or green claims not only are at risk of breaching the Act but they also reduce consumer confidence in such claims and disadvantage ethical traders doing the right thing," Mr Samuel said.
Consumer concerns about the veracity of claims on carbon offsets have led the ACCC to develop guidance for consumers and industry on the Trade Practices Act implications of carbon offset claims and other environmental claims in advertising.
The ACCC has launched the publications, Carbon Claims and the Trade Practices Act, Green marketing and the Trade Practices Act, and For Consumers: Environmental Issues which deal specifically with these issues.
"Our focus is on ensuring that appropriate steps are taken by business so that claims of carbon offsets or carbon neutrality are not misleading and that these claims are clear and understandable for consumers." Mr Samuel said.
"Companies risk breaching the Trade Practices Act if they give an overall impression to consumers that their product is environmentally friendly when it isn't.
"The ACCC will continue to be vigilant on 'greenwashing' and will not hesitate to take enforcement action, including Federal Court action, against traders who make false or misleading representations to consumers, as has been demonstrated by this case."