Contributors
Being "green" in 2022 is as fashionable as ever. Consumers are seeking a more sustainable lifestyle and making eco-friendly choices, such as to eat green, travel green and shop green. It is no surprise therefore that businesses are making more environmental claims regarding their goods and services in order to cater for this demand.
The UK Competition and Markets Authority (CMA) put businesses on notice last year that it would carry out a full review of misleading green claims at the start of 2022, after it found that 40% of green claims made online could be misleading, and that it would prioritise which sectors to review.
An announcement followed on 10 January 2022 that the CMA had launched a review of green claims in the fashion retail sector.
Green Claims Code General Principles
The review follows the publication of the CMA's Green Claims Code in September 2021, intended to provide practical guidance, in the form of general principles, to help businesses to make compliant environmental claims about their business, services and products.
The guidance sets out six principles that businesses must follow when making environmental claims:
- Claims must be truthful and accurate
- Claims must be clear and unambiguous
- Claims must not omit or hide important relevant information
- Comparisons must be fair and meaningful
- Claims must consider the full life cycle of the product or service
- Claims must be substantiated.
The CMA has made it clear that it could take enforcement action against businesses that do not comply with the Green Claims Code. The Advertising Standards Authority (ASA) can also investigate and take action against any misleading adverts.
Issues for the fashion retail sector
The CMA has specifically highlighted that it will consider claims that clothing and ranges of clothing are 'sustainable,' or 'better for the environment', and claims about the use of recycled materials in new clothing. Retailers need to ensure that they are able to substantiate any such claims and do not over exaggerate the "green" credentials.
A good example of this point was made in a recent ASA ruling which concerned a claim that a drinks bottle was "100% recycled*" even though the bottle lid and label were not made of recycled materials. It was held that the small print, which although excluded the bottle lid and label from the claim, was not sufficient enough to counteract the overall impression that all parts of the bottle were made entirely from recycled materials and it was therefore held to be misleading. This provides a strong warning to businesses of the importance of being clear when making environmental claims and considering how information is presented.
It is now more important than ever for businesses to ensure the evidence used to substantiate any claim is still suitable and up to date, whilst the claim itself should be honest, explicit and easily understandable.
In light of the CMA's investigation, businesses should take the time to identify any environmental claim and review compliance against the Green Claims Code to avoid enforcement action and bad publicity. The CMA and ASA websites should also be monitored for specific sector guidance.
