New legal code puts greenwashing firms ‘on notice’

The Competition and Markets Authority has published a ‘Green Claims Code’ to tackle misleading claims by businesses, warning that firms have until the end of 2021 to comply with the law.

Posted on 29 September 2021

The Competition and Markets Authority (CMA) has published a ‘Green Claims Code’ to tackle misleading claims by businesses, warning that firms have until the end of 2021 to comply with the law.

The new guidance has been published to help businesses understand how to communicate their green credentials without misleading their customers, following a consultation on the widespread issue of greenwashing earlier in the year.

The Green Claims Code focuses on 6 principles of consumer law:

  • Claims must be truthful and accurate: Businesses must live up to the claims they make about their products, services, brands and activities

  • Claims must be clear and unambiguous: The meaning that a consumer is likely to take from a product’s messaging and the credentials of that product should match

  • Claims must not omit or hide important relevant information: Claims must not prevent someone from making an informed choice because of the information they leave out

  • Comparisons must be fair and meaningful: Any products compared should meet the same needs or be intended for the same purpose

  • Claims must consider the full lifecycle of the product or service: When making claims, businesses must consider the total impact of a product or service. Claims can be misleading where they don’t reflect the overall impact or where they focus on one aspect of it but not another

  • Claims must be substantiated: Businesses should be able to back up their claims with robust, credible and up to date evidence

 

Priority sectors

Following an initial bedding-in period, the CMA will begin carrying out a full review of misleading green claims, both online and offline, from the start of 2022.

Sectors being prioritised in the first instance will be those where consumers appear most concerned about misleading claims, including textiles and fashion, travel and transport, and fast-moving consumer goods. However, any sector where the CMA finds significant concerns would become a priority.

Where there is clear evidence of breaches of consumer law, the CMA will take action against offending firms. One area of current concern is potential greenwashing of ‘green’ energy tariffs - the government has recently announced a review to tighten rules.

Offenders beware

“More people than ever are considering the environmental impact of a product before parting with their hard-earned money,” explained Andrew Coscelli, chief executive of the CMA. “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.”

Greenwashing: What it is and how to avoid it

 

 

 

 

 

 

 

 

Posted under General Interest on 29 September 2021