The Commerce Commission has warned a Wellington taxi company that it may be misleading consumers with its 'going green' campaign.

The Commission began investigating the claims being made by Wellington Combined Taxis, the largest operator in the capital, in March this year after receiving a complaint.

Specifically, the complaint was that the company was breaching the Fair Trading Act, by publishing false and misleading information on its website.

The website claimed that the company's LPG cars "reduce C02 pollution by up to 25%" and that the Nissan Maxima 31/2 litre V6 petrol engine CVT transmission is "20% more fuel efficient than traditional automatic transmissions."

The Commerce Commission's Director of Fair Trading, Adrian Sparrow said "The growing trend to greenwashing by businesses is cause for concern if the green, eco-friendly or sustainability claims are false or misleading. In fact, the Commission has identified this as a new focus area, due to the proliferation overseas of such claims in marketing hype."

"Businesses need to be careful to ensure they can back up their claims. Consumers are increasingly aware of environmental issues, and may be influenced to purchase from one company ahead of another based on claims about sustainability, or carbon neutrality, or eco-friendliness. If those claims are false or over-inflated, not only has the consumer been misled, but businesses that have lost trade to the business making the claims, have also been harmed," said Mr Sparrow.

"All those in business making such claims should take a good hard look at how they might justify those claims, as the Commission will be monitoring the issue closely. The Commission will take enforcement action under the Fair Trading Act where necessary," warned Mr Sparrow.

Wellington Combined Taxis has been issued a warning letter by the Commission and advised to change its compliance processes to ensure future representations are accurate.

Background

Greenwashing is potentially deceptive marketing designed to portray a company or product as caring for the environment, when the claims can't be substantiated.

Penalties for breaching the Fair Trading Act include fines up to $60,000 for an individual and $200,000 for a company. Only the courts can decide whether the Act has been breached.