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CMA to crack down on greenwashing with ‘Green Claims Code’

CMA warns businesses that they have until the new year to ensure their claims comply with the law/Image: Michael Fornton/Flickr

The Competition and Markets Authority (CMA) – a UK government regulatory body – is cracking down on environmental and sustainability claims, warning that businesses have until the new year to ensure their claims comply with the law.

Last year, the CMA announced that it was investigating the impact of green marketing on consumers, in line with its annual plan commitment. Working alongside other global authorities, it found that 40% of green claims made online could be misleading – suggesting that thousands of businesses could be breaking the law and risking their reputation.

Published today, the ‘Green Claims Code’ will now help businesses understand how to communicate their green credentials while reducing the risk of misleading consumers through marketing and advertising. It launches as the CMA becomes increasingly concerned about people being misled by environmental claims while also hoping to ensure that businesses feel confident navigating the law in this area.

What is the code?

The code will focus on six principles that are based on existing consumer law. It makes clear that firms making green claims “must not omit or hide important information” and “must consider the full life cycle of the product”. It forms part of a wider awareness campaign that the CMA has launched ahead of Cop26.

The CMA says it will prioritize the sectors to be reviewed in the coming months, which could include industries where consumers appear most concerned about misleading claims – textiles and fashion, travel and transport, and fast-moving consumer goods (FMCG) such as food and beverages, beauty products and cleaning products. However, any sector where the CMA finds significant concerns could become a priority. Where there is clear evidence of breaches of consumer law, the CMA may also take action before the formal review begins.

Andrea Coscelli, chief executive of the CMA, said of the code: “More people than ever are considering the environmental impact of a product before parting with their hard-earned money. We’re concerned that too many businesses are falsely taking credit for being green, while genuinely eco-friendly firms don’t get the recognition they deserve.

“The Green Claims Code has been written for all businesses – from fashion giants and supermarket chains to local shops. Any business that fails to comply with the law risks damaging its reputation with customers and could face action from the CMA.”

Will it help?

The UK is currently under scrutiny from the global community on how it plans to tackle its role in the climate crisis. Ahead of Cop26, the launch of the code marks a clear message from the CMA that it intends to do its part in addressing greenwashing and misleading environmental claims by brands, allowing consumers to make more educated choices on how their purchases impact the planet.

Awareness of these issues has never been greater, and while consumers are often emboldened by their knowledge – using social media to hold brands to account – policy plays a significant role in cracking down on false advertising.

Geraint Lloyd-Taylor, a partner in the advertising and marketing team at law firm Lewis Silkin, said: “There is significant pressure now for brands to communicate their green credentials but, simply put, they need to walk the talk. If they are found wanting, regulators will be taking an increasingly dim view of those masquerading as ‘green’ while undermining efforts to help consumers make more informed and responsible choices.

“The CMA will not only draw consumers’ attention to these failures but will bring prosecutions where it is necessary in order to compel compliance.”

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