Crackdown on Greenwashing with New “Green Claims Code”

The Competition and Markets Authority (CMA) has published a new Green Claims Code to help businesses understand and comply with their obligations under consumer protection law, when making environmental and sustainability claims. These ‘green claims’ were created to demonstrate how a product, service, brand or business reduces harm to the environment.

What is the Green Claims Code?

The Code is part of a wider awareness campaign launched by the CMA ahead of COP26. It focusses on six principles of consumer law, detailing that firms making green claims “must not omit or hide important information” and “must consider the full life cycle of the product”.

Following an initial introductory period, the CMA will carry out a full review of misleading green claims from 2022, including claims that are made in-store or on labelling. Sectors where consumers have expressed concerns about misleading claims will be prioritised, however any sector in which significant concerns are raised may become a priority.

Andrea Coscelli, Chief Executive of the CMA, said:

“More people than ever are considering the environmental impact of a product before parting with their hard-earned money. We are concerned that too many businesses are falsely taking credit for being green, while genuinely eco-friendly firms do not 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.”

Why was the Code created?

The Code was published on 20th September 2021 in response to a CMA investigation last year on the impact of green marketing on consumers, which found that 40% of green claims made online could be misleading. The Code sets out clear guidance on what can be classified as a ‘green claim’.

How do businesses ensure compliance with the law when making green claims?

Businesses should check their green claims against the Code and seek legal advice if they are unsure whether their claims comply with the law.

Green claims are genuine only when they properly describe the impact of a product, brand, business or service, with evidence to back it up.

As a guide, green claims must:

1. Be truthful and accurate: Businesses must live up to the claims they make about their products, services, brands and activities.

2. Be clear and unambiguous: The meaning a consumer is likely to take from a product’s messaging and the credentials of that product should match.

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

4. Only make fair and meaningful comparisons: Any products compared should meet the same needs or be intended for the same purpose.

5. Consider the full life cycle of the product: When making claims, businesses must consider the total impact of a product or service.

6. Be substantiated: Businesses should be able to back up their claims with robust, credible and up-to-date evidence.

Further information on how to comply with consumer protection law in relation to green claims is available by looking at the CMA’s green claims checklist.

The Green Claims Code should help businesses remain compliant with the law and protect consumers from false ‘eco’ claims about products and services. It therefore provides a prime opportunity for organisations who have been working hard to mitigate their social and environmental impact and have the data to support this. Those who fall short in terms of environmental and sustainability credentials now risk losing customers and their reputation.