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The Commerce Commission has set its sights on the practice of "greenwashing", saying it will get tough on businesses that make over-inflated claims to be green or sustainable.
The watchdog has sent a letter to a Wellington taxi company warning its "going green" campaign may be misleading. It says the move is just the beginning of a crack-down on similar dubious environmental claims.
The commission began investigating Wellington Combined Taxis in March after receiving complaints about claims on its website. The website suggests the company's LPG taxis reduce carbon dioxide pollution by up to 25 per cent, and its Nissan Maxima engines are 20 per cent more fuel efficient than traditional automatic transmissions.
Commission Fair Trading director Adrian Sparrow said a trend towards using green marketing hype overseas had prompted the watchdog to take a closer look at the issue here.
Business' claims to be green, eco-friendly or sustainable became a problem when they were false or misleading, he said.
"Consumers are becoming increasingly aware of environmental issues, and might be influenced by claims about sustainability, carbon neutrality, or eco-friendliness. If those claims are false or over-inflated, not only has the consumer been misled, but businesses that have lost trade to the business making the claims have also been harmed."
"All those in business making such claims should take a good hard look at how they might justify those claims, as the Commission will be monitoring the issue closely," he warned.
"Greenwashing" is the name given to businesses that pose as environmentally friendly without genuine evidence of change.
A recent survey by G2 advertising agency showed consumers were well aware of the issue, with 67 per cent believing most companies were still not environmentally conscious and used the environment simply as a marketing tool. Forty-two per cent of respondents didn't believe companies when they said they were carbon friendly.
Michael Hooper, of eco-labelling trust Environmental Choice New Zealand, said people could measure a company's environmental claims by looking for the trust's eco-label. The government-owned trust independently audits the companies that apply for the eco-label and checks their environmental claims.
A record of companies with the Environmental Choice tick of approval is kept on the trust's website: www.enviro-choice.org.nz/licensees.html.
