Greenwashing in Australia: Spot Deceptive Sustainability Claims in 2025

Green is the new black in Australian finance—but not every eco-friendly claim stands up to scrutiny. As sustainable investing and conscious consumerism surge, so too does the risk of being misled by greenwashing. In 2025, Australians face an ever-growing wave of companies and funds touting their environmental credentials. But how can you tell what’s real and what’s just clever marketing?

What Is Greenwashing—and Why Is It a Problem in 2025?

Greenwashing occurs when businesses overstate or fabricate their environmental efforts to attract eco-minded consumers and investors. With sustainable investing now accounting for nearly 50% of managed assets in Australia, according to the Responsible Investment Association Australasia’s 2025 report, the temptation for companies to exaggerate their green credentials has never been higher.

• Example: A superannuation fund claims to be “carbon neutral,” but invests in companies with significant fossil fuel exposure.
• Consequence: Investors and consumers may inadvertently support businesses with poor environmental track records, undermining real progress on climate goals.

The Australian Securities and Investments Commission (ASIC) has already cracked down on several high-profile cases, issuing warnings and taking enforcement actions against misleading environmental claims. In 2025, ASIC’s powers have expanded, with new penalties for non-compliance under updated consumer protection laws.

How to Spot Greenwashing: Red Flags for Consumers and Investors

Not every green label is created equal. Here are key signs of greenwashing to watch for in 2025:

• Vague Language: Terms like “eco-friendly,” “green,” or “sustainable” without clear definitions or measurable outcomes.
• Lack of Transparency: Companies that don’t disclose their environmental impact data, supply chain details, or independent verification.
• Irrelevant Claims: Highlighting minor green features while ignoring bigger environmental harms (e.g., “recyclable packaging” for a product with a high carbon footprint).
• No Third-Party Certification: Absence of credible certifications such as Climate Active, B Corp, or the Green Building Council of Australia.

In 2025, ASIC and the Australian Competition and Consumer Commission (ACCC) have launched the Green Claims Code, setting out clear guidelines for businesses making environmental statements. The code requires:

• Evidence-based claims
• Specific, accurate, and up-to-date information
• Transparent disclosures about the scope and limitations of green initiatives

For investors, the Australian Prudential Regulation Authority (APRA) now mandates climate risk disclosures for major banks and super funds. Checking a fund’s Product Disclosure Statement (PDS) for independent sustainability audits is more important than ever.

Protecting Your Wallet and the Planet: Practical Steps

Australians are demanding more from their money, but vigilance is key. Here’s how to avoid greenwashing traps in 2025:

1. Do Your Homework: Scrutinise company reports, look for third-party certifications, and check for independent audits.
2. Ask Tough Questions: Don’t hesitate to contact companies or fund managers about the specifics of their sustainability claims.
3. Follow the Regulators: Stay updated on ASIC and ACCC actions—both agencies regularly publish lists of investigated or penalised businesses.
4. Support Genuine Leaders: Choose products and investments with transparent, measurable, and externally verified green initiatives.

Real-world example: In early 2025, a major Australian retailer was fined for misleading “carbon neutral” claims after an ACCC investigation revealed its offsets were double-counted and not independently verified. This led to a surge in consumer demand for more rigorous climate action reporting across the sector.

Why Genuine Sustainability Matters for Your Financial Future

Greenwashing isn’t just a marketing problem—it can directly impact your financial returns and the planet’s future. Investments in companies with poor environmental practices face higher regulatory, reputational, and transition risks, especially as Australia tightens climate policies. The government’s 2025 National Sustainability Strategy sets new emissions targets and reporting standards, making it more likely that greenwashers will be caught out.

By demanding real transparency and holding companies accountable, Australians can help drive a financial system that rewards genuine climate solutions—protecting both your portfolio and Australia’s unique environment.