Is greenwashing illegal in Australia? The plain answer

The short answer

There is no law in Australia called the "Greenwashing Act" and no criminal offence named "greenwashing". But that does not mean greenwashing is legal. In practice, it is unlawful whenever an environmental or sustainability claim is misleading, deceptive, or unable to be substantiated — because that conduct breaches the Australian Consumer Law (ACL), which applies to almost every business operating in Australia.¹

The distinction matters. Greenwashing is a civil wrong, not a crime. The regulators — the ACCC and ASIC — bring civil penalty proceedings in the Federal Court, issue infringement notices, or accept court-enforceable undertakings. Nobody goes to prison. But the financial penalties are among the largest in Australian corporate law, and they apply per contravention.

Which laws actually apply

Three main pieces of legislation cover greenwashing in Australia:

• Australian Consumer Law (ACL) — Schedule 2 of the Competition and Consumer Act 2010 (Cth). The workhorse. Section 18 prohibits misleading or deceptive conduct in trade or commerce. Sections 29 and 33 prohibit false or misleading representations about the standard, quality, value, grade, composition, style, model or history of goods or services — including representations about environmental attributes.²
• ASIC Act 2001 (Cth) — mirrors sections 18 and 29 of the ACL for financial products and services. This is the provision ASIC uses against super funds, listed companies and investment products that overstate ESG credentials.³
• Sector-specific rules — the National Greenhouse and Energy Reporting Act, Climate Active administrative rules, and the mandatory climate reporting regime rolling out from January 2025 under the AASB S2 standard for large entities. These add reporting duties on top of the general ACL prohibition.⁴

For most Australian small and medium businesses, the ACL is the one that matters. Section 18 in particular is broad, strict and does not require the ACCC to prove you intended to mislead — only that the conduct was likely to mislead a reasonable member of the target audience.²

Who enforces it, and what have they done recently

The ACCC has named misleading environmental and sustainability claims as a formal compliance and enforcement priority every year from 2022–23 through 2025–26.⁵ Its 2022 internet sweep of 247 Australian businesses across fashion, cosmetics, food, energy, transport, medical, electronics and toys found 57% had made claims that raised concerns.⁶ Recent action includes an $8.25 million Federal Court penalty against Clorox Australia in April 2024 for misleading "ocean plastic" claims on GLAD bin liners.⁷

ASIC has pursued the largest greenwashing penalties to date, all against financial services businesses:

• Vanguard Investments Australia — $12.9 million (September 2024) for misleading claims about ESG exclusions in its Ethically Conscious Global Aggregate Bond Index Fund.⁸
• Mercer Superannuation — $11.3 million (August 2024) for misleading statements about the sustainable characteristics of its Sustainable Plus investment options.⁹
• LGSS Pty Ltd (Active Super) — $10.5 million (June 2024) for misleading claims about ESG exclusions covering tobacco, gambling, Russian investments and coal mining.¹⁰

Between July 2022 and June 2024 ASIC took 47 regulatory interventions on greenwashing, including three Federal Court proceedings and 20 infringement notices.¹¹

What "misleading" actually means (and why intent doesn't save you)

Section 18 of the ACL is a strict-liability provision. The test is objective: would the conduct be likely to mislead or deceive a reasonable member of the target audience? An honest but mistaken belief that a claim is accurate is not a defence to liability. It is only relevant to the size of any penalty.²

The Federal Court and the regulators look at the overall impression a claim creates, not just its literal accuracy. A technically true statement in tiny disclaimer text at the bottom of a page will not cure a misleading headline claim at the top. Visual elements — leaf icons, green colour palettes, nature imagery — can also contribute to a misleading overall impression, which is one reason the ACCC's eight principles specifically call out visual claims.¹²

The penalties, in plain numbers

For contraventions occurring on or after 9 November 2022, the maximum civil penalty per contravention for a body corporate is the greater of:

• $50 million;
• three times the value of the benefit obtained from the contravention (if the court can determine it); or
• 30% of the adjusted turnover of the body corporate during the breach period.

For individuals, the maximum penalty per contravention is $2.5 million. Directors and senior managers can be held accessorially liable under section 224 of the ACL where they were knowingly concerned in the conduct.²

Alongside civil penalties, courts can order corrective advertising, adverse publicity orders, redress for affected consumers, non-punitive orders such as compliance programs, and disqualification of individuals from managing corporations.

What small businesses actually risk

Most small businesses will not face a $12 million penalty. Realistic enforcement paths for smaller operators are:

• Infringement notices — since 2022, the amount is 60 penalty units per contravention for corporations, which currently equates to around $18,780 per notice, and 12 penalty units (around $3,756) for individuals. The ACCC can issue multiple notices for a single campaign.¹³
• Court-enforceable undertakings under section 87B — a written promise to fix the conduct, publish corrective statements, and often to implement a compliance program. Breach of an undertaking is itself actionable.
• Public warning notices — reputationally damaging even when no penalty follows, because they surface in search results indefinitely.
• Federal Court proceedings — reserved for the most serious or repeat conduct, but not limited by business size.

For the internet-sweep sectors specifically, see our small-business ACCC enforcement guide and the current list of Australian enforcement examples.

What makes a claim safe under the law

The ACCC's December 2023 guidance, Making environmental claims: A guide for business, distils compliance into eight principles. Taken together they answer the question "what does the ACCC actually want to see?":¹²

1. Make accurate and truthful claims.
2. Have evidence to back up your claims.
3. Don't hide or omit important information.
4. Explain any conditions or qualifications on your claims.
5. Avoid broad and unqualified claims.
6. Use clear and easy-to-understand language.
7. Ensure visual elements don't give the wrong impression.
8. Be direct and open about your sustainability transition.

A claim that satisfies all eight is unlikely to attract enforcement action. A claim that fails one or two — most commonly the "evidence" and "avoid broad and unqualified claims" principles — is where the risk sits. For a fuller walkthrough, see the ACCC guidance explained in plain English.

Frequently asked questions

The bottom line

Greenwashing is not a standalone crime in Australia. It is unlawful because misleading environmental claims are captured by the same consumer protection laws that cover any other kind of misleading business conduct — and those laws carry some of the highest civil penalties on the Australian statute book. The safest path for any business making sustainability claims is to write them so a reasonable customer would take away the same impression as the underlying evidence supports, and to keep that evidence on file.