CMA publishes new Green Claims Code for businesses

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To help businesses understand how to communicate their green credentials while reducing the risk of misleading shoppers, the Competition and Markets Authority (CMA) has published a new Green Claims Code.

The CMA has warned businesses they have until the New Year to make sure their environmental claims comply with the law. Businesses are advised to check their green claims against the Green Claims Code and seek legal advice if they are unsure whether their claims comply with the law.

Andrea Coscelli, Chief Executive of the CMA, commented on the announcement: “More people than ever are considering the environmental impact of a product before parting with their hard-earned money.

“We’re concerned that too many businesses are falsely taking credit for being green, while genuinely eco-friendly firms don’t get the recognition they deserve.

“The Green Claims Code has been written for all businesses – from fashion giants and supermarket chains to local shops.

“Any business that fails to comply with the law risks damaging its reputation with customers and could face action from the CMA.”

The Green Claims Code focuses on six principles based on existing consumer law. These principles are:

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

Following an initial bedding-in period, the CMA will carry out a full review of misleading green claims, both on and offline (e.g. claims made in store or on labelling), at the start of 2022.

The CMA will prioritise which sectors to review in the coming months, which could include industries where consumers appear most concerned about misleading claims – textiles and fashion, travel and transport, and fast-moving consumer goods (food and beverages, beauty products and cleaning products).

However, any sector where the CMA finds significant concerns could become a priority.

Where there is ‘clear evidence of breaches of consumer law’, the CMA may also take action before the formal review begins.

Minister of State for Energy and Clean Growth, Greg Hands, added: “Millions of UK households are rightly choosing to switch to green products as they look to reduce their carbon footprint. But it’s only right that this commitment is backed up by transparent claims from businesses.

“The competition regulator’s new code will help to ensure this with advice on how best to communicate and understand environmental claims.

“Government is also currently reviewing green energy tariffs to ensure consumers can be confident they are choosing companies that make a conscious choice to invest in renewable energy.”

The Code is part of a wider CMA awareness campaign launched ahead of COP26.

More information about the Green Claims Code is available on the campaign website.