Greenwashing: Competition law is going green

Greenwashing: v. a  verb denoting a claim or a set of claims made by an organisation or person about the positive impact that a they, their company, product or service has on the environment but which is false, misleading or untrue.

On a daily basis we are bombarded with claims of actions, goods or services beneficial or neutral to the environment.

The Competition and Markets Authority has a duty to protect the consumer and the markets. In September 2021 they published guidance on ‘green claims’. To summarise that guidance, if you are a company making a ‘Green Claim’ for your company, its product, or its environmental credentials, then you need to follow the code.

Green advertising must be:
  1. Truthful and accurate
  2. Clear and unambiguous
  3. Without omission or hiding of important information
  4. Comparisons must be fair and meaningful
  5. Claims made must be backed by evidence

In January 2022, the CMA started investigations into ASOS, Boohoo and Asda. The CMA’s concerns centre on:
  • The language used by the companies being too vague
  • The standards applied by the companies are lower than consumers have a right to expect
  • Products which fall below the standards adopted are adopted in ad campaigns regardless of their failure to meet the standards
  • No information is provided to customers
  • Misleading information on fabric accreditation schemes

As of 23.01.2023 the matter has gone out to public consultation.

The CMA has also started an investigation into ‘Fast Moving Consumer Goods (FMCG)’. FMCG- defined broadly as regular daily purchases, account for £134bn annually in terms of consumer spend. The CMA will investigate environmental claims. As of 23.01.2023 this, too, has gone out to public consultation.

The housing sector will be next.

In short, we have a more active CMA on our hands with new powers and a new focus on environmental claims.

The CMA is also starting to exercise its new powers to protect and enforce consumer protection law with powers to fine up to 10% of global turnover.

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