New CMA guidance provides practical advice on making environmental claims
The Competition and Markets Authority (the “CMA”) has published practical guidance on the Green Claims Code (the “Code”) for fashion retail businesses. The guidance aims to support fashion retailers to “comply with the principles of the Code and with the consumer protection law which underpins it, to ensure that consumers are not misled and to help create a level playing field for fair dealing businesses”.
The Code was introduced in 2021 to ensure consumers, for whom environmental claims play an increasingly important role in their decision making, are not being misled in relation to green claims generally. The guidance follows on from the CMA’s recent investigation into three major fast fashion retailers’ environmental claims and the retailers’ subsequent undertakings in respect of their marketing practices.
Other industries and sectors may also find the guidance useful as it gives more examples of how CMA expects businesses to comply with the Code in practice which will be helpful for businesses looking to avoid accusations of greenwashing (making unsubstantiated claims about a product’s environmental impact or properties). This is very important as enforcement by the CMA and ASA is ongoing and the EU is seeking to clamp down on greenwashing through the introduction of the Green Claims Directive and specific EU guidance on sustainability claims.
The guidance highlights the following actions, with supporting examples and considerations:
- Make your environmental claims clear and accurate.
- Don’t hide important information: it should be easy to locate and with environmental claims made, “clear and prominent” and “presented in a way that consumers can easily identify, read and understand the relevant information as a whole”.
- Avoid using unclear terms, such as ‘green’, ‘sustainable’ or ‘eco-friendly’ which are too general and could mislead consumers.
- Do not use imagery and icons in a misleading way: icons and imagery should not result in “a misleading impression of the product’s impact on the environment.”
- Ensure comparisons are clear: comparisons should be “like for like” and it should be clear what is being compared and the basis of comparison. Statements such as “more sustainable”, “less harmful” or “better” risk misleading consumers unless there is substantiating information.
- Explain clearly any action a consumer needs to take if this is required for a product’s environmental claim to be accurate.
- Be clear when using filters and other navigational tools on websites to ensure that consumers are not given a misleading impression of a product’s environmental characteristics. The guidance provides the example of a filter for “recycled dresses” which could lead consumers to believe that all the dresses included under the filter are made from 100% recycled materials.
For businesses who sell “environmental” product ranges, the following steps should be taken: explain the range criteria clearly to consumers, don’t mislead consumers with the name of your range (e.g. by using unclear terms) and make sure range marketing is not misleading (e.g. by only including products that meet the range criteria).
Describe fabrics clearly and precisely: for example, include the composition of a fabric if required to support a claim, use objective descriptions (e.g. recycled rather than environmentally conscious), do not imply that the whole product has environmental characteristics if this is untrue.
When using affiliations and accreditations, don’t mislead consumers when referring to affiliations and accreditations in respect of individual products, provide further details about affiliations and accreditations, make it clear if a claim is based on specific parts of a product’s life cycle, ensure environmental targets are presented clearly and think about the overall presentation of claims.
Put in place processes to make sure your claims are right, including making sure your suppliers can back up claims and checking any claims third parties make about their products.
For more information on greenwashing or the latest developments in this area, the Mills & Reeve ESG blog has a range of resources, including: