Kmart NZ Faces Commerce Commission Warning Over Greenwashing Claims

The Commerce Commission has issued a warning to Kmart NZ regarding its claims about “100% sustainably sourced cotton,” stating these assertions could mislead consumers. The Commission has raised concerns that the retailer may have violated the Fair Trading Act by making unsubstantiated environmental claims in its advertising.

According to Vanessa Horne, the general manager of the Commerce Commission, greenwashing poses a significant risk, as it misleads consumers into believing that products are more environmentally friendly than they truly are. “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,” Horne remarked.

Kmart’s assertion of “100% sustainably sourced cotton” suggests a level of certainty that the Commission believes the retailer could not substantiate. The Commission highlighted that Kmart acknowledged its “Better Cotton” was mixed with conventional cotton within its supply chain. As a result, the company could not confirm whether all of the cotton used in its clothing was sourced from Better Cotton farmers or was sustainably produced.

Horne emphasized the growing consumer awareness surrounding environmental issues, stating, “Unsubstantiated claims are unfair for businesses who put in the time and resource to make sure their environmental claims are legitimate.” She expressed support for companies pursuing sustainability initiatives but stressed the importance of accuracy in advertising. “Our message to businesses is simple: if you can’t back it up, don’t say it,” Horne added.

Consumers concerned about potentially misleading claims can report them through the Commission’s website. The contested claims regarding sustainable cotton were first made on August 4, 2023, and were removed on October 4, 2024. The Commerce Commission has indicated that legal action may be pursued if similar conduct occurs in the future.

Kmart has been approached for a comment on the matter.