Kmart NZ Faces Commerce Commission Warning Over Greenwashing Claims

The Commerce Commission has issued a warning to Kmart NZ regarding potentially misleading claims about its environmentally friendly products. The commission contends that Kmart may have violated the Fair Trading Act by advertising its cotton as “100% sustainably sourced” without adequate substantiation.

According to Vanessa Horne, general manager of the commission, the practice of greenwashing poses a significant risk to consumers. This term refers to situations where businesses promote products as more environmentally friendly than they truly are, leading well-meaning consumers to make uninformed purchasing decisions. Horne emphasized, “Consumers have a right to clear and accurate information, and greenwashing makes it virtually impossible for a consumer to identify if a product is genuinely sustainable.”

The commission highlighted that Kmart’s assertion of “100% sustainably sourced cotton” implies a high level of certainty that the retailer did not possess. Kmart acknowledged that its “Better Cotton” is blended with conventional cotton in its supply chain. This means the retailer cannot guarantee that all cotton in its clothing is sourced from Better Cotton farmers or is genuinely sustainable.

Horne pointed out that consumers are increasingly factoring environmental considerations into their purchasing choices. “Unsubstantiated claims are unfair for businesses that invest time and resources to ensure their environmental claims are legitimate,” she stated. “We are very supportive of businesses getting involved in sustainability initiatives, but as with any advertising, claims made must be accurate and backed up to avoid breaching the Fair Trading Act.” She added, “Our message to businesses is simple: if you can’t back it up, don’t say it.”

The commission is encouraging consumers to report any concerns regarding potentially misleading claims through its website. Kmart’s claims about 100% sustainable cotton were made on August 4, 2023, and were subsequently removed on October 4, 2024. The Commerce Commission has indicated that it retains the option for legal action if such conduct is repeated in the future.

Kmart has been requested to provide a comment regarding this warning. The ongoing scrutiny of sustainability claims underscores the importance of transparency and accountability in the retail sector, particularly as consumers become more environmentally conscious.