Environmental issues are high on the agenda for consumers and business alike, across the world and across all sectors. There is intense pressure on businesses to improve (and be seen to improve) their ‘green’ credentials. Many businesses are doing so very willingly and enthusiastically, but, in the UK, the fact businesses are under the hot glare of regulators means that businesses need to know how to get the message right to maximise the benefits of ‘going green’ and to stay on the right side of UK regulators.
Taking a step back for a moment, the UK’s Competition and Markets Authority (CMA), has been concerned about companies making unsupported ‘green claims’ for some time. The CMA believes that around 40% of online claims made by companies about the environmental credentials of their businesses, products or services, are potentially misleading. Those green claims have a very significant effect on consumers’ purchasing decisions. Therefore, the CMA wants to make sure that green claims are truthful and reliable, wherever they appear. This includes claims on packaging, company websites, retailer websites, social media, advertising and marketing, or anywhere else that falls within the CMA’s broad remit. Separately, when it comes to advertising and marketing, another regulator – the Advertising Standards Authority (ASA) – has also put green claims at the top of its agenda, and will also bring enforcement action where appropriate in the coming weeks and months.
What are ‘green claims’?
So-called ‘green claims’ include claims that suggest or create the impression that a product or a service:
- has a positive environmental impact, or no impact, on the environment;
- is less damaging to the environment than a different version of the same product or service;
- is less damaging to the environment than competing products or services.
What are misleading claims?
Examples of potentially misleading claims include:
- Claiming that packaging is more environmentally friendly than it actually is;
- Claiming that you have reduced your manufacturing process’s carbon footprint when you haven’t;
- Claiming that products are organically produced if they are not;
- Claims that goods or a manufacturing process use less energy or water than they actually do, or are energy/water-efficient when they are not;
- Claiming that a product has been approved by an environmental agency when it has not.
What is the Green Claims Code, and what does the Green Claims Code say?
To help businesses understand how to communicate their green credentials while reducing the risk of misleading shoppers, the CMA has published the Green Claims Code and intends to start enforcing it from January 2022. The Code focuses on six principles which are based on existing consumer law:
Claims must be truthful and accurate. Claims must not mislead consumers by giving them an inaccurate impression, even if those claims are factually correct. They must only give consumers the impression that a product, service, process, brand or business is as green and sustainable as it really is.
Claims must be clear and unambiguous. They should not be presented in ways that may confuse consumers or give the impression that a product, service, brand or business is better for the environment than it is.
Claims must not omit or hide important relevant information that consumers need to make informed choices. For example, you may be using less plastic in your packaging, but importing from overseas, whereas you used to make it locally.
Comparisons must be fair and meaningful. Comparisons should be based on clear, up to date and objective information. They should not benefit one product or brand to the detriment of another if the comparison is inaccurate or false.
Claims must consider the full life cycle of the product or service. This means that all characteristics of a product’s or service’s environmental impact over its life cycle, including its supply chain, should be considered. This might include a product’s component parts; how and where it is manufactured, produced or carried out; how it is transported from its place of manufacture or origin; its use or performance; the disposal of a product, and any waste or by-products; the consequences of any environmental benefit claimed and the period in which it would be realised; and whether the product or service has an overall adverse effect on the environment.
Claims must be substantiated. Most environmental claims are likely to be objective or factual claims that can be tested against scientific or other evidence. As claims must be truthful and accurate, businesses should have evidence to support them. Put this evidence together before you make your claim – don’t wait until the CMA or ASA come calling!
How to avoid greenwashing
Consider the six principles above. In particular, do not cherry-pick your claims, tell the whole story, and ensure you have robust evidence for your claims in advance.
What happens if my business does not comply?
If a business does not comply with consumer protection law, the CMA and other bodies, such as Trading Standards, can bring court proceedings. The CMA’s remit covers claims in all media, including packaging and labelling, websites, brochures, social media, in-store, and in advertising and marketing, and so on. In some cases, businesses may be required to pay redress to any consumers harmed by the breach of consumer protection law, and provide legally binding assurances to the CMA to ensure they do not breach the rules again. In time, the CMA may be able to impose fines.
The ASA’s remit is slightly more limited. The ASA’s remit covers advertising and marketing, including social media and online claims, but their remit does not extend to packaging, labelling or point of sale materials. The ASA could also take action against misleading advertisements that contravene the advertising codes of practice and refer the more serious transgressions to Trading Standards for court action. Unlike the CMA and Trading Standards, the ASA does not have the power to prosecute or bring fines on its own, but can require that certain claims are not repeated in advertising, marketing, on a company’s website or on social media.
The remit of the CMA and ASA overlap, but the CMA is likely to focus initially on industries it believes consumers are most concerned about misleading claims, in particular textiles and fashion, travel and transport, and fast-moving consumer goods (food and beverages, beauty products and cleaning products). The ASA will focus on claims made in advertising and marketing, initially they will focus on claims involving “aviation, cars, waste, animal-based foods and heating”.
About Geraint Lloyd-Taylor
A Partner in the Lewis Silkin’s Advertising & Marketing team, Geraint was named Next Generation Partner for Brand Management in the Legal 500 2022 rankings. He provides legal advice in relation to all kinds of brand-led content, including advertising and marketing campaigns, social and PR, on a range of legal and regulatory issues.
Want to learn more how brands can communicate sustainability? Check out our Greenwashing in fashion: the dos and don’ts for brands webinar.