Making environmental greenwashing less fashionable: CMA guidance

Making environmental greenwashing less fashionable: CMA guidance

On 18 September 2024, the Competition & Markets Authority (CMA) published a compliance Guide which is intended to provide fashion brands with practical guidance on how they can comply with consumer law so that consumers are not misled by statements about a company’s or a product’s climate and environmental credentials, or “environmental claims” as they are commonly referred to. This guidance comes as part of the CMA’s efforts in recent years to tackle ‘greenwashing.’ 

In September 2021, the CMA published the Green Claims Code in order to help businesses understand and comply with their existing obligations under consumer protection laws when making environmental claims (for more information see our earlier perspectives here and here). In 2022, the CMA began reviewing misleading green claims, in particular in the fashion and textiles sectors, having estimated that UK consumers spend £54 billion annually on clothing and footwear and that fashion is responsible for between 2 and 8% of global carbon emissions.[1] In July of the same year, the CMA announced an investigation scrutinising environmental claims made by ASOS, Boohoo and George at Asda. The companies subsequently signed formal agreements with the CMA to only use accurate and clear green claims and to change the way they display, describe and promote their green credentials. The CMA also published an open letter at the time, highlighting the need for businesses to consider their obligations under consumer protection law.

Compliance Guide – key principles

Following the principles of the CMA’s Green Claims Code, the Guide provides practical guidance for fashion brands and draws on conclusions from the CMA’s 2022 investigation. It is applicable to all businesses that make environmental claims about clothing, footwear, fashion accessories, and related services (for example packaging, delivery and returns) and contains relevant information for manufacturers, suppliers, wholesalers, and distributors.

The Guide has two overriding principles:

  • the need to ensure that environmental claims are clear and accurate, and
  • the requirement to have in place processes to make sure such claims are correct.

Ensuring environmental claims are clear and accurate:

The Guide highlights the need for environmental claims to be clear and accurate, and further specifies that businesses must not hide important information; must avoid using unclear terms; and must not use imagery and icons in a misleading way. Businesses must further ensure that any comparisons, product ranges, fabric descriptions, and affiliation and accreditations are clear and not misleading. Where an environmental claim is dependent on actions on the part of the consumer, the claim must also explain clearly any action the consumer needs to take. Lastly, where a website or app provides filters or other navigational tools (such as drop-down menus) to allow consumers to find products on the basis of their environmental credits, these should be presented in a manner that does not mislead consumers.

Processes to make sure environmental claims are correct:

The Guide emphasises the need to have internal processes to ensure that brands provide consumers with up-to-date and accurate information. For example, having regular staff training and systems to correct mistakes when listing products for sale. In particular, the Guide notes the need to ensure suppliers are able to evidence environmental credentials and to check any claims third parties make about their products.

Further to the issuance of the Guide, the CMA has also sent letters to 17 well-known fashion brands advising them to review their practices. While the CMA has not yet named these brands, this further step also highlights the CMA’s commitment to enforcing consumer protection laws in relation to environmental claims made by businesses.

Comment

Environmental claims made by businesses are also covered by the Committee of Advertising Practices Code which is enforced by the Advertising Standards Authority (ASA), which has also launched its own enforcement actions regarding environmental claims in recent years.  In the ASA’s ruling on JC Atkinson & Son Ltd, the Authority held that claims that particular coffins were “eco-friendly” were misleading where they company was unable to substantiate that the material the coffins were made out of had no negative impact on the environment across their full life cycle.  Similarly, in its ruling on Air France, the ASA held that an online ad claiming that “Air France is committed to protecting the environment: travel better and sustainably” was misleading given that the absolute environmental claims being made were not substantiated.

Given both the CMA and ASA’s focus on misleading environmental claims, we anticipate there will continue to be enforcement action in this space.     

Footnotes

[1] See the CMA, ‘Fashion greenwashing: investigation into ASOS, Boohoo and Asda’ (26 January 2023) <Fashion greenwashing: investigation into ASOS, Boohoo and Asda - GOV.UK (www.gov.uk)> (accessed 29 September 2024).[2] Protecting environmental sustainability is a priority for the CMA as set out in its Annual Plan 2024-2025.