UK CMA Moves to Investigate ‘Green’ Claims
On 2 November 2020, the UK Competition and Markets Authority (CMA) announced that it will be investigating descriptions and labels used to promote products and services claiming to be ‘eco-friendly’ and whether they could mislead consumers.
The concern for the CMA is that an increase in demand for sustainability could lead to businesses making misleading, vague or false claims about the environmental impact of the goods or services.
The CMA has specified that misleading behaviour could include:
- Exaggerating the positive environmental impact of a product or service
- Using complex or jargon-heavy language
- Implying that items are eco-friendly through packaging and logos, when this is not true.
Furthermore, the CMA will examine whether failing to provide all relevant information about the sustainability of a product or service could mislead consumers and infringe consumer law. This could include a product not being recyclable or being highly polluting.
Primarily, the CMA’s investigation will be focusing on the industries where consumers appear to be most concerned about misleading ‘green’ claims. This includes textiles and fashion, travel and transport and fast-moving consumer goods (food and beverages, beauty products and cleaning products). If the CMA finds evidence that businesses are misleading consumers, it will take enforcement action.
The CMA has released questionnaires for consumers, businesses and stakeholders on what consumers expect from eco-friendly products, how often they come across green claims, and how these affect their buying decisions. The call for information closes on 14 December. By summer 2021, the CMA aims to produce guidance for businesses on how they can best be transparent in the manner in which they market goods and services in relation to claims about environmental impact.
In the meanwhile, the UK Government has already issued guidance on how to make an accurate environmental claim for a product, service or organisation, and the UK Advertising Standards Authority (ASA) has produced rules on environmental claims.
UK legislation which regulates misleading green claims includes the Consumer Protection from Unfair Trading Regulations 2008, which implements the EU Misleading and Comparative Advertising Directive. The legislation is enforced on a day-to-day level by the ASA under the CAP Code, but the CMA and trading standards operate as a legal back-stop, having the power to ultimately enforce through the courts if necessary.
This is not just a UK-specific concern, and the CMA is working with the Dutch Authority for Consumers and Markets, as part of a project with ICPEN (the International Consumer Protection and Enforcement Network). During November, the CMA is managing a ‘sweep’ of a random selection of websites with ICPEN members in order to ascertain the types of misleading green claims around the world.
As we move ever closer to the 2050 carbon neutral deadline, this development from the CMA acts as an important reminder for businesses to ensure that any products or services are marketed as clearly as possible to ensure that consumers are not being misled.