Environmental claims are a regulatory focus area internationally and in New Zealand, and the legal framework is not new — it is the ordinary prohibition on misleading conduct applied to a category where claims are difficult to verify.
The two provisions that apply
Misleading conduct. The Fair Trading Act prohibits conduct in trade that is misleading or deceptive or likely to mislead. There is no requirement of intent. The test is the overall impression created on the relevant audience.
Unsubstantiated representations. A separate prohibition on making a representation about goods or services without reasonable grounds — at the time the representation is made, regardless of whether it later turns out to be true.
That second provision does most of the work in environmental claims. If you say a product reduces emissions by 40 percent, you need the basis when you say it. Producing evidence afterwards does not cure the breach.
Where claims go wrong
Vague terms without a defined basis. “Sustainable”, “eco-friendly”, “green”, “environmentally responsible” mean nothing specific. Used without qualification they create an impression of overall environmental benefit that the business frequently cannot support.
Highlighting one attribute while the overall impact is poor. Recyclable packaging on a product with a large footprint elsewhere can mislead by emphasis even where every individual statement is accurate.
Claiming a legal requirement as an achievement. Advertising the absence of a substance that is already banned implies a benefit over competitors who are equally compliant.
Unqualified recyclability. “Recyclable” where facilities do not exist in most of New Zealand, or where recycling requires separation the consumer will not do, is misleading. Recyclability should be qualified by where and how.
Future commitments presented as current achievements. A target for 2030 is not a present-day claim, and the distinction must be clear.
Imagery and colour. Green packaging, leaf motifs and natural imagery create impressions. The overall impression is what is assessed, not just the words.
Carbon neutral and offset claims
This is the highest-risk category.
A claim of carbon neutrality based on offsets raises several questions a regulator will ask: what emissions were measured and what scope was included, what reductions were achieved before offsetting, what the offsets actually are, whether they represent genuine additional reduction, and whether the claim makes clear that offsetting rather than reduction is the basis.
Claims that a product is “carbon neutral” without disclosing reliance on offsets, or based on offsets of questionable integrity, have attracted enforcement action in comparable jurisdictions.
If you make such a claim, be prepared to explain the whole chain.
What substantiation looks like
- A specific claim rather than a general one. “This product uses 30 percent less water in manufacture than our previous formulation” is defensible in a way that “water friendly” is not.
- A stated basis of comparison. Less than what — the previous version, an industry average, a competitor?
- Evidence held before publication, filed with the campaign.
- Recognised methodology where one exists, including life cycle assessment or Environmental Product Declarations.
- Third-party certification where available, which is the strongest form.
Certification schemes
Recognised certifications — Environmental Choice New Zealand, Forest Stewardship Council, organic certification, Green Star and Homestar for buildings — provide independent substantiation.
Represent them accurately. Claiming certification you do not hold, or implying that certification of one product line extends across the range, is a straightforward breach.
The commercial dimension
Beyond regulatory risk, environmental claims are increasingly checked by customers, particularly business customers running their own supply chain assessments. A claim that does not survive a procurement questionnaire costs a contract.
Reporting entities disclosing value chain emissions need supplier data that stands up. Suppliers making claims they cannot evidence create a problem for their customer, and that gets noticed.
Practical process
Before any environmental claim goes out, someone should be able to point at the substantiation. Where the claim is comparative or quantified, that means a document rather than a belief.
Review existing marketing material too. Claims made years ago on a website remain representations, and standards for what is acceptable have moved.
The Commerce Commission publishes specific guidance on environmental claims under the Fair Trading Act, free at comcom.govt.nz. It is written for businesses and is the right first stop.
General information only, not legal advice.
