Continued focus on greenwashing

What's the issue?

There is growing recognition that we all need to be greener, particularly in terms of our consumption. The younger you are, the more likely you are to factor in green credentials when making purchasing choices but it's not just the young who want to make more environmentally responsible choices. As a result, it's increasingly common to hear or see sustainability claims in advertising and marketing. But what do these claims really mean and are they always what they appear to be? This is a concern which the CMA, and advertising regulator the ASA - in conjunction with the Committee of Advertising Practice (CAP) and its broadcasting equivalent BCAP, have been working to address, most recently with a few developments over the last month.

What's the development?

CMA Greenwashing investigation into ASOS, Boohoo and Asda

At the end of January, concerned about the way that products are being marketed to customers as "eco-friendly" the CMA opened an investigation into ASOS, Boohoo and Asda, looking into green claims made about their fashion products. The CMA has released a video on the investigation.

The investigation will consider:

whether statements and language used are too vague – creating an impression that eco-friendly clothing collections are more environmentally sustainable than they actually are
the criteria used to decide which products to include in these collections and why items have been included when they do not meet the criteria used
the lack of information provided to customers about items included in eco ranges
potentially misleading statements made about fabric accreditation schemes and standards.

The CMA has not yet reached a view on whether consumer protection law has been breached.

'Fast Moving Consumer Goods' now within scope of CMA misleading green claims project

On 26 January 2023, the CMA announced that it will be expanding its misleading green claims project to look at Fast Moving Consumer Goods (FMCG).

The review will examine products that are essential items used by people on a daily basis and repurchased regularly, such as food and drink, cleaning products, toiletries, and personal care items.

The CMA will analyse environmental claims made about such products – both online and in store – to consider whether companies are complying with UK consumer protection law. Problematic claims may include:

the use of vague and broad eco-statements, e.g. packaging or marketing a product as ‘sustainable’ or ‘better’ for the environment with no evidence
misleading claims about the use of recycled or natural materials in a product and how recyclable it is
entire ranges being incorrectly branded as ‘sustainable’.

If the CMA uncovers evidence suggesting green claims could be unfounded, it will consider taking enforcement action using its formal powers.

Updated guidance on environmental claims in advertising

On 10 February, CAP and BCAP published updated guidance: The environment: misleading claims and social responsibility in advertising. The updates provide guidance on the use of carbon neutral and net zero claims in advertising, reflecting key principles of the CMA's guidance on environmental claims on goods and services. This includes:

Avoid using unqualified carbon neutral, net zero or similar claims. Information explaining the basis of the claims should be included.
Marketers should ensure they include accurate information about whether (and the degree to which) they are actively reducing carbon emissions or are basing claims on offsetting.
Claims based on future goals should be based on a verifiable strategy to deliver them.
Where claims are based on offsetting, they should comply with the usual standards of evidence for objective claims and marketers should provide information about the schemes they are using.
Where it is necessary to include qualifying information about a claim, the information should be sufficiently close to the main aspects of the claim for consumers to be able to see it easily and take account of it before they make any decision. The less prominent any qualifying information is and the further away it is from any main claim being made, the more likely the claim will mislead consumers.

The ASA will now monitor compliance and may invite CAP to launch a review and provide updated guidance about what forms of evidence are more or less likely to be acceptable to substantiate such claims in advertising. The ASA will also take action against any unqualified claims which are likely to breach existing rules.

What does this mean for you?

In short, the continuing focus on this area means you cannot make green claims lightly. They must be accurate, capable of substantiation across the lifecycle of a product, and clear, particularly in relation to qualifications. You can read our Beginner's guide to making environmental advertising claims here, or listen to our the episode of our podcast Sidebar which focuses on making environmental marketing claims.

Cross-border businesses need to be aware that rules on making environmental claims differ from country to country, and not least, across the EU. The European Commission is hoping to make thins easier for advertisers by proposing a new Directive on green claims intended to create EU-wide harmonised standards on substantiation and communication of environmental advertising claims. The Directive (a version of which has been leaked and published on Euractiv) is expected to be formally proposed on 22 March 2023, but it will obviously be some time before it comes into effect, particularly as it will need to be transposed into Member State law. In the meantime, a fragmented approach will continue. Watch out for our April edition of Interface which will focus on environmental claims in advertising in key EU jurisdictions.