ACCC embeds sustainability into 2023-24 Product Safety Priorities

3 minute read 21.06.2023 Kate Hilder, Siobhan Doherty

Key takeaways from ACCC Chair Catriona Lowe's 15 June 2023 address to the National Consumer Congress

Key takeouts

The ACCC has announced its latest move towards embedding sustainability into its broader regulatory approach, announcing that 'sustainability and maintaining product safety' is included among its four product safety priorities for 2023-24
The ACCC's sustainability taskforce is also set to consider where 'environmental and sustainability issues intersect with the application of competition and consumer law' more broadly
This is in line with Australian (and overseas) regulators' increasing focus on ESG/sustainability. For example, in Australia: Consideration of climate related risk is now an explicit expectation for the Australian Prudential Regulation Authority. Climate risk is included among APRA's key supervisory priorities for 2023 similarly, the Australian Securities and Investments Commission (ASIC) Chair Joe Longo has identified the following as key areas of focus:

Good governance – ensuring ESG is integrated into existing governance frameworks – in preparation for upcoming changes

Tackling greenwashing (a key enforcement priority)

Preparing for the growth in sustainable financing

APRA, ASIC, the Reserve Bank of Australia and Treasury, through the Council of Financial Regulators Climate Working Group, have also been engaged since 2017 on 'coordinating actions in relation to understanding and managing financial climate-related risks'.

Embedding 'sustainability' into the ACCC's broader approach

Our key takeaways from Australian Competition and Consumer Commission (ACCC) Chair Catriona Lowe's 15 June 2023 address to the National Consumer Congress are below.

Product safety priorities announced

Among the ACCC's four product safety priorities for 2023-24 is a new priority 'sustainability and maintaining product safety'. This includes plans for the regulator to:

publish a 'scoping study' on the potential safety hazards associated with lithium-ion batteries, which may ('if required' include proposed risk mitigation strategies.
consider 'ways to ensure key safety requirements in standards made under the Australian Consumer Law are sufficiently available to successive owners of products'.
update recall guidelines to cover the circular economy (the ACCC has indicated this is planned to occur over the next 12 months)
explore the potential development of 'best practices to reduce safety risks from reused or second-hand goods that are sold online'.

The ACCC's sustainability taskforce will coordinate this work (in addition to other sustainability-focused initiatives across the regulator).

The ACCC's other three product safety priorities for 2023-24 are:

product safety online including detection and prevention of unsafe product listings and 'developing best practices to reduce the safety risks from second hand goods sold online' (the ACCC has indicated this is planned to occur over the next 12 months)
infant sleep products with a focus on implementing measures to prevent injuries/deaths associated with infant sleep products
young children's product safety including taking 'appropriate regulatory and enforcement action against businesses' that are not complying with regulatory requirements, improving the effectiveness of product recalls and stepping up consumer awareness activities

Why include 'sustainability and maintaining product safety'?

Ms Lowe summed up why the ACCC has prioritised this as follows:

'This is a new priority, reflecting the changing purchasing behaviours of consumers as they seek to be more environmentally conscious and look for more sustainable products. Our work for this priority will involve activities to support consumer confidence in the safety of sustainable products that are helping to underpin Australia’s transition to net zero and a circular economy. By making sustainability and maintaining product safety a priority, we’re ensuring that we do not perform our product safety functions in a way that creates unnecessary barriers to industry or governments that are pursuing environmental and sustainability objectives'.

Embedding sustainability into the ACCC's broader approach

Ms Lowe underlined that in addition to the work detailed above, the ACCC sustainability taskforce will:

'examine a range of issues where environmental and sustainability issues intersect with the application of competition and consumer law. It will also identify the need for competition exemptions for new technologies and maintaining product safety without impeding economic transformation'.

Greenwashing

Ms Lowe reiterated the regulator's continued focus on tackling greenwashing, stating that the ACCC is 'determined to make a real difference in this area'.

Ms Lowe observed that consumer law is only one part of the broader framework needed to address the issue.

This is in line with recent comments from Australian Securities Investments Commission (ASIC) Deputy Commissioner Karen Chester and separately, comments from ASIC Chair Joe Longo, that enforcement of compliance with existing disclosure requirements is only one aspect of the measures necessary, and being progressed, to tackle greenwashing and more broadly, to support the government's net zero by 2050 ambition.

An important development is the expected roll out of new internationally aligned, mandatory disclosure standards which importantly, will go further than the TCFD framework in a number of respects.

In a recent speech, ASIC Chair Joe Longo flagged that Treasury is expected to release a position paper on these standards 'within the next fortnight' which will outline the proposed implementation timeline.

[Source: ACCC Deputy Chair Catriona Lowe, Keynote address to the National Consumer Congress 2023 15/06/2023]