CMA highlights what constitutes greenwash

Avoiding greenwash: CMA highlights businesses’ eco claims that could break law

Retailers and other businesses have been given guidance on how to avoid greenwash and provided with examples of when their eco claims might break the law.

The Competition and Markets Authority (CMA) has listed advice on what retailers and other organisations must do when talking up their products’ ‘eco-friendliness’ – and the regulator is now seeking views on the draft guidance from the business community.

As reported by Green Retail World, the CMA announced last year it was investigating the impact of green marketing on consumers. As part of this, the CMA led on an analysis of websites – alongside other global authorities – which found that 40% of green claims made online could be misleading or constituted greenwash.

With environmental impact a key consumer concern when making purchases today and with government and business making commitments to reduce carbon emissions, the CMA’s guidance on avoiding greenwash and misleading the public is timely.

The proposed guidance sets out six principles that environmental claims should follow. They:

  • must be truthful and accurate: businesses must live up to the claims they make about their products, services, brands and activities
  • must 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
  • must not omit or hide important information: claims must not prevent someone from making an informed choice because of the information they leave out
  • must only make fair and meaningful comparisons: any products compared should meet the same needs or be intended for the same purpose
  • must consider the full lifecycle 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
  • must be substantiated: businesses should be able to back up their claims with robust, credible and up to date evidence.

The CMA uses an example of a company selling toiletries online which presents a range of products with a green banner across the corner of the image stating, “save our seas – these are micro bead free”. According to the regulator, this is likely to be misleading or greenwash as it suggests a benefit in comparison to other products, when in fact micro beads are banned in the UK and should not be in any products anyway.

Another example of a misleading statement by a business, according to the CMA, is a comparative claim that a clothing range is now “greener”. This is because it does not make clear the basis for the comparison.

Andrea Coscelli, CEO of the CMA, said: “Whether it’s buying clothes, cosmetics or cleaning products, more people than ever are trying to make choices which are better for the environment.

“Many businesses are already doing the right thing by being clear and upfront about how green a product really is, but that’s not always the case. We’re concerned that people are paying extra for so-called ‘eco-friendly’ products and those businesses which are genuinely investing in going green aren’t getting the recognition they deserve.”

He added: “We’re seeking views on our draft guidance, which clearly sets out what we propose businesses should do, to reduce the risk of misleading their customers. People must be able to trust the claims they see and businesses must be able to back them up.

The CMA is inviting views on its guidance and is particularly keen to hear from those buying or selling products which claim to be eco-friendly, and is calling for feedback on whether further information is needed to help companies comply with the law.

The consultation will run until 16 July 2021, with the aim of publishing the final guidance by the end of September 2021.

[Image credit: Green Retail World]

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