Being “green” in 2022 is more fashionable than ever. Consumers are looking for a more sustainable lifestyle and making environmentally friendly choices like eating green, traveling green and buying green. It is therefore not surprising that companies are increasingly making environmental claims about their goods and services in order to meet this demand.
The UK’s Competition and Markets Authority (CMA) warned businesses last year that it would carry out a full review of misleading green claims in early 2022, after finding that 40% of green claims made online could be misleading, and that it would prioritize the areas to be examined.
An announcement followed on January 10, 2022 that the CMA had launched a review of green claims in the fashion retail sector.
General principles of the Green Claims Code
The review follows the publication of the CMA’s Green Claims Code in September 2021, intended to provide practical guidance, in the form of general principles, to help companies make compliant environmental claims about their activities, services and products. .
The guidance sets out six principles for companies to follow when making environmental claims:
- Complaints must be truthful and accurate
- Claims must be clear and unambiguous
- Claims should not omit or obscure important relevant information
- Comparisons must be fair and meaningful
- Claims must take into account the full life cycle of the product or service
- Complaints must be substantiated.
The AMC has made it clear that it may take enforcement action against companies that do not comply with the Green Claims Code. The Advertising Standards Authority (ASA) can also investigate and take action against misleading advertising.
Challenges for the fashion distribution sector
The CMA specifically pointed out that it will review claims that clothing and clothing lines are “sustainable” or “better for the environment” and claims about the use of recycled materials in new clothing. Retailers should ensure they are able to substantiate such claims and not overstate “green” credentials.
A good example of this point was made in a recent ASA decision regarding a claim that a beverage bottle was “100% recycled” even though the bottle’s lid and label were not made from of recycled materials. It was felt that the fine print, which excluded the bottle lid and label from the claim, was not sufficient to counter the general impression that all parts of the bottle were made entirely from materials recycled and therefore misleading. This is a strong warning to companies about the importance of being clear when making environmental claims and reviewing how information is presented.
It is now more important than ever for companies to ensure that the evidence used to support any claim is always appropriate and up to date, while the claim itself must be honest, explicit and easily understood.
In light of the MAC investigation, companies should take the time to identify any environmental claims and review compliance with the Green Claims Code to avoid enforcement action and bad publicity. The CMA and ASA websites should also be monitored for specific sector advice.
