CMA (finally!) resolves investigation into fashion retailers, issues open letter to fashion industry

Way back in July 2022, the CMA (Competition and Markets Authority) put fashion retailers under its very own spotlight by launching investigations into ASOS, Boohoo and George at Asda (which together make over £4.4 billion annually from UK fashion sales alone). Today, the CMA has announced the resolution of its investigation into those companies, and has made the details public.

Back in the summer of 2022, there were concerns the CMA would want to push for financial penalties in this case, as it is the first batch of greenwashing investigations by the CMA. Fast forward to late March 2024, and the CMA has resolved the matter by accepting/eliciting undertakings from those three companies.

The undertakings secured by the CMA commit ASOS, Boohoo and George at Asda to change the way they display, describe, and promote their green credentials, meaning millions of customers can expect to see clear and accurate green claims.

The companies have each committed to a series of undertakings, including a commitment to comply with a set of specific rules around the use of green claims. Amongst other things, these include:

• Green claims: the companies must ensure all green claims are accurate and not misleading. Key information must be clear and prominent, meaning it must be expressed in plain language, easy to read, and clearly visible to shoppers.
• Statements regarding fabrics: Statements made about materials in green ranges must be specific and clear, such as ‘organic’ or ‘recycled’, rather than ambiguous – e.g., using terms like ‘eco’, ‘responsible’, or ‘sustainable’ without further explanation. The percentage of recycled or organic fibres must be clearly displayed and easy for customers to see. A product cannot be called ‘recycled’ or ‘organic’ unless it meets certain criteria.
• Criteria for green ranges: The criteria used to decide which products are included in environmental collections – such as ASOS’s former ‘Responsible edit’, Boohoo’s ‘Ready for the Future’ range, and George at Asda’s ‘George for Good’, and any further ranges – must be clearly set out and detail any minimum requirements. For example, if products need to contain a certain percentage of recycled fibres to be included in the range, this should be made clear. Products must not be marketed or labelled as part of an environmental range unless they meet all the relevant criteria.
• Use of imagery: The firms must not use ‘natural’ imagery – such as green leaves – logos, or icons in a way that suggests a product is more environmentally friendly than it actually is.
• Product filters: Search filters must be accurate, only showing items that meet the filter requirements – for example, if a consumer uses a filter to show ‘recycled’ trousers, only trousers made from predominantly recycled materials should be shown.
• Environmental targets: Any claims made to consumers about environmental targets must be supported by a clear and verifiable strategy, and customers must be able to access more details about it. Such information should include what the target is aiming to achieve, the date by which it is expected to be met, and how the company in question will seek to achieve that target.
• Accreditation schemes: Statements made by the companies about accreditation schemes and standards must not be misleading. For example, statements must make clear whether an accreditation applies to particular products or to the firm’s wider practices.

All three companies must also regularly provide the CMA with reports on how they are complying with the commitments they signed – as well as taking steps to improve their internal processes.

Open letter to the sector

As part of this latest update, the CMA has also issued an open letter to the sector, urging fashion retail businesses to review their claims and practices in light of the undertakings, which set a benchmark for the industry. 

Green Claims Code to be updated

The CMA has also stated that it will help businesses stay on the right side of the law by building on its current Green Claims Code with additional information that will be tailored to the fashion sector.