The Australian Competition and Consumer Commission has confirmed it is watching the evolving green business sector closely after forcing a green power company to purchase carbon credits it had promised to buy on behalf of customers, but never did.
The company, Global Green Plan, has taken part in a Government program designed to encourage home owners to use green power.
Under the GreenPower scheme, Global Green accepted payments from customers and promised to purchase renewable energy certificates on their behalf.
But Global Green, which was eventually deregistered from the Global Green program, didn’t use all the money taken from customers to buy the certificates.
“The ACCC investigated the GreenSwitch activities and found the numbers didn’t match up,” acting ACCC chairman Michael Schaper says.
“To take money from customers and not use it as it was intended is simply unacceptable.”
It’s the second “green” action launched by the ACCC this week. On Tuesday it launched action against carbon capture company Prime Carbon over allegedly misleading claims made by the firm.
Schaper says climate change-related sectors continue to evolve at a rapid rate, which means problems will occur.
“It is an area with some challenges and it is an area we are paying close attention to,” he told SmartCompany this morning.
“These are markets where consumers don’t fully understand what’s on offer to them, businesses are still coming to grips with what they can and can’t do, and regulators are still grappling with how consumer’s expectations are matching up with promises from business.”
Schaper says there are two main areas of concern – green marketing (where companies use claims about a product’s environmental impact, energy efficiency of “greeness”) and carbon claims (which involves claims about carbon offsets, carbon sequestration and carbon reduction).
“I think generally, 99% of the problems are genuinely making mistakes. But there is a small group out there who are carbon cowboys,” Schaper says.
His advice for small businesses who are involved in green-related businesses is to tread carefully when making any claims about their credentials.
“The best advice is to make sure that whatever you claim is, it be specific rather than broad and generalised. That’s the way small businesses can stay on the right side of the law.”
He also says businesses who claiming carbon credits need to be careful about the way these credits are accounted for (Schaper says double counting is a big problem) and the bona fides of those selling carbon credits.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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