CMA gives businesses until the New Year to ensure their environmental claims are compliant

The CMA today published its long-awaited “Green Claims Code”.

Andrea Coscelli, Chief Executive of the CMA, said that “More people than ever are considering the environmental impact of a product before parting with their hard-earned money. 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 intention is to provide businesses of every kind with enough guidance to ensure their claims comply with the law, whether on or off line (on websites, in store, on packaging and so on). 

The main piece of legislation underpinning the rules is the Consumer Protection from Unfair Trading Regulations 2008 (also known as the CPRs). 

And this guidance is not some meaningless document to be filed in the bottom drawer. Businesses will need to review their claims and take action because the CMA will carry out a full review of misleading green claims early next year. It warns businesses that it stands ready to take action against offending businesses.

General green claims won't wash

The CMA is concerned about people being misled by environmental claims and also wants to ensure that businesses feel confident navigating the law in this area.

The Green Claims Code focuses on 6 principles which are based on existing consumer law. It is clear that firms making green claims “must not omit or hide important information” and “must consider the full life cycle of the product”.

Environmental 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 that 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. Claims can be misleading where they don’t reflect the overall impact or where they focus on one aspect of it but not another;
6. be substantiated: Businesses should be able to back up their claims with robust, credible and up to date evidence.

Enforcement

Following an initial bedding-in period, the CMA will carry out a full review of misleading green claims, both on and offline at the start of 2022. 

In the coming months, the CMA will soon identify sectors it intends to prioritise, which could include industries where consumers appear most concerned about misleading claims – textiles and fashion, travel and transport, and fast-moving consumer goods (food and beverages, beauty products and cleaning products). However, the CMA makes clear that any sector where the CMA finds significant concerns could become a priority.

Where there is clear evidence of breaches of consumer law, the CMA may also take action even before the formal review begins.

The (currently very busy) Minister of State for Energy and Clean Growth, Greg Hands, said:

“Millions of UK households are rightly choosing to switch to green products as they look to reduce their carbon footprint. But it’s only right that this commitment is backed up by transparent claims from businesses.  The competition regulator’s new code will help to ensure this with advice on how best to communicate and understand environmental claims.  Government is also currently reviewing green energy tariffs to ensure consumers can be confident they are choosing companies that make a conscious choice to invest in renewable energy.”

Last year, the CMA found that arond 40% of green claims made online could be misleading – suggesting that thousands of businesses could be breaking the law, misleading consumers and risking their reputation.

The CMA emphasises that the Green Claims Code has been published following extensive consultation with businesses of all sizes and consumer groups. The CMA urges businesses to check their green claims against the Code and seek legal advice if they are unsure whether their claims comply with the law.

Cop for this!

The Code is part of a wider awareness campaign which the CMA has launched today ahead of COP26.