Green Claims

The Competition and Markets Authority (CMA) is the UK’s primary competition and consumer authority responsible for regulating markets to eliminate practices that harm consumer interests.

They focus on trying to eliminate business practices and contract terms that are unfair to the consumer, primarily because they are misleading or dishonest, and which are unfair to other businesses because they hinder competition on a level playing field.

The CMA’s guidance helps businesses understand best practices to avoid misleading consumers. The CMA also has wide-ranging powers, including the authority to bring to court proceedings against businesses that violate consumer protection law.

They work closely with other bodies, such as the Advertising Standards Authority (ASA) and Trading Standards Services, to enforce the Consumer Protection from Unfair Trading Regulations 2008, and Business Protection from Misleading Marketing Regulations 2008.

The Competition and Markets Authority’s Green Claims Code is a comprehensive document that outlines how businesses should conduct themselves to avoid ‘greenwashing’ and advises how to make legitimate green claims that accurately describe the environmental impact of products, brands, businesses, and/or services. Sufficient evidence is required to back up green claims.

The guidance is extensive but not exhaustive and does not constitute formal legal advice. It remains a business’s responsibility to interpret the guidance and determine what they believe to be fair and legal practices.

The guidance is not aimed at removing green claims altogether, rather it’s been put in place to promote genuine claims, reduce the number of false green claims (greenwashing), and help businesses and consumers make informed choices within a fair market.

If the Competition and Markets Authority, Advertising Standards Authority, or Trading Standards believe that a business is making an illegitimate green claim, and is therefore not complying with consumer protection law, they can bring court proceedings against the offending business.

Consumers also have the right to bring their own court proceedings against businesses making illegitimate green claims.

It is therefore important that a business is 100% sure about any green claim it wishes to make.

The guiding principles, set out in the Green Claims Code, are as follows:

• Claims must be truthful and accurate
• Claims must be clear and unambiguous
• Claims must not omit or hide important, relevant information
• Comparisons must be fair and meaningful
• Claims must be substantiated
• Claims must consider the full life cycle of the product or service

The Competition and Markets Authority advises that businesses do the following:

• Comply with any sector or product-specific laws which apply to your business, its products, or its services
• Use its guidance and comply with any obligations the business has under consumer protection laws
• Use the guidance to consider whether changes need to be made to business practices
• Make any necessary changes to ensure compliance with the law

Any UK business that makes a green claim is liable; however, online marketplaces have further responsibilities concerning the green claims of sellers marketing via their platform.

They can be found liable for misleading green claims if they:

• do not ensure that products sold on their platform comply with the law (either by failing to prevent misleading claims, or failing to remove claims that they know to be misleading)
• market themselves as a marketplace for environmentally friendly products or services

Retailers and wholesalers can be liable for false green claims made by manufacturers on the packaging of the goods they sell, even where the manufacturer and wholesaler are also deemed liable.

Businesses should therefore be vigilant that the claims they are making, and the claims of businesses they work with, comply with the standards set out by the Competition and Markets Authority.