CMA gives businesses until the New Year to ensure their green claims are compliant
Earlier this week, the Competition and Markets Authority (CMA) published its Green Claims Code, The code aims to help businesses understand how to communicate their green credentials while reducing the risk of misleading shoppers. “Greenwashing” (convincing consumers that a business is doing more to protect the environment than it really is) has caught the attention of consumers and regulators, and it is likely to be a trending topic into 2022. As a result, companies should take care not to push the boundaries too far when making green claims in advertising.
Partner James Corlett takes a closer look.
How does this affect my business?
Brands are under increasing pressure to communicate their green credentials, but these must be legitimate and backed up by evidence. Any business that fails to comply with the law risks damaging its reputation with customers and could face enforcement action from the CMA.
When will it affect my business?
The formal review will not commence until January 2022, so businesses have some time to get this right. Following this initial bedding-in period, the CMA will carry out a full review of misleading green claims, both online and in store or on labelling), but where there is clear evidence of breaches of consumer law, the CMA may take action before the formal review begins.
Who will be first on the hit-list?
The CMA states that it’s ready to take action against offending firms and is likely to focus on those sectors where consumers appear most concerned about such claims. This includes textiles and fashion, travel and transport, and fast-moving consumer goods (food and beverages, beauty products and cleaning products).
What can my business do?
The Green Claims Code focuses on six principles which are based on existing consumer law. Essentially, firms making green claims must not “omit or hide important information” and “must consider the full life cycle of the product”.
The Code is part of a wider awareness campaign which the CMA has timed to coincide with COP26 – there are more details here.
The Advertising Standards Authority has become increasingly active in challenging ‘greenwashing’ claims taking action but the launch of the code marks a clear message from the CMA that it intends to take action to ensure that consumers can make more educated choices on how their purchases impact climate changes. Businesses should check their green claims against the Code and seek legal advice if they are unsure whether their claims comply with the law.