Greenwashing… now is the time to get it right warns the CMA! New guidance issued…

On the same day, the CMA sent letters of concern to 17 well-known fashion brands⁴ advising them to review their sustainability claims amid an ongoing crackdown on greenwashing ("Letters").⁵ The CMA has not launched enforcement action against these fashion brands and declined to name them. However, this follows hot on the heels of: (i) a concluded investigation into companies including Boohoo, Asda and ASOS,⁶ earlier this year, where the CMA required retailers to give undertakings to clarify their green claims.⁷ and (ii) an open letter that the CMA published at the same time to the wider fashion industry about misleading environmental claims.⁸

The CMA’s Guidance and Letters signal an increased focus on consumer rights in relation to environmental claims and strong continuing concerns the CMA has that companies in the fashion industry are still making vague, general and misleading environmental claims that could deceive consumers.

The Guidance and Letters also remind the fashion industry that the CMA will shortly have strengthened consumer powers under the Digital Markets, Competition Competition and Consumers Act 2024 ("DMCCA"), due to come into effect in April 2025. The CMA shall have the ability to fine companies up to 10% of global revenue if they break consumer protection laws.

The CMA's interim senior director of consumer protection Hayley Fletcher has made clear: "Now is the time for businesses to reflect and get it right", "there's no excuse for using misleading green claims" and "…all fashion companies – from designer labels to budget-friendly brands or independent boutiques - must be transparent and honest with their customers or risk enforcement action". 

It is therefore vital for fashion brands not to "overstep the mark" and to review their current marketing practices swiftly before April 2025 and ensure that all environmental claims are clear, accurate, truthful, specific, and supported by evidence.

Key points from the CMA Guidance

While the Guidance is tailored to retailers, it makes clear that "all stakeholders" in the supply chain (including manufacturers and distributors) for the supply of clothes, footwear, fashion accessories and related services (e.g. packaging, delivery and returns) must ensure their claims are accurate and substantiated.

The tailored Guidance sets out a number of key recommendations and practical tips (many based on the CMA's Green Claims Code) supported by visual examples to help fashion retailers stay on the right side of the law, some of which are set out below:

• Clear and Accurate Claims: Environmental claims must be clear and accurate whether they are made on a product, in advertising materials, in-store or online. Important information that consumers need to ensure that a claim is not misleading should be easily accessible and not hidden behind a QR code or displayed separately from the environmental claim being made.
• Avoid Vague Language: Phrases such as “environmentally friendly”, "eco-friendly" or “sustainable” should be used cautiously as they are likely to be inaccurate and mislead consumers.
• Substantiated Claims: Any claims about sustainability must be backed by credible evidence. For instance, if a brand claims its clothing is made from “recycled materials,” it should clearly specify the percentage of recycled content and provide proof.
• Comparative Claims: If a company makes comparisons with competitors regarding sustainability, those comparisons must be fair and verifiable. For instance, stating that a product is “greener than the market average” must be supported by clear data and benchmarks.Consumers should be able to make informed choices about competing products and businesses, or between different versions of the same product.
• Imagery and Icons: Stakeholders should avoid using logos, imagery and icons (e.g. a leaf or the planet) in a misleading way especially as they can give the impression of the product's impact on the environment.
• Fabric Description: The CMA indicates that when environmental claims are based on the product's fabric composition, rather than use ambiguous terms such as "responsible cotton", stakeholders should use objective and verifiable descriptions such as "50% recycled content".
• Lifecycle Impact: Environmental claims should consider the entire lifecycle of a product, from production to disposal. If a company makes a claim based on a specific part of a product’s life cycle, then it should provide a clear and prominent summary of the aspect of the life cycle to which the claim relates, as well as access to further information.
• Affiliations or Accreditations: details should be provided about any affiliations or accreditations cited to support any environmental claims.
• Full Transparency: Brands should provide full information about the environmental impact of their products, including any limitations in their sustainability claims. Transparency helps consumers make informed choices and fosters trust in the brand.

Due diligence and processes

The Guidance also clarifies that companies should put in place processes to ensure claims are true, accurate and not misleading. This may include appropriate policies and regular training for staff, and systems to check product listings are correct and advertised appropriately. In particular, the Guidance indicates that companies should be able to back up any claims before they make them with robust, credible, relevant and up-to-date evidence. Companies should have internal processes to mitigate against and correct mistakes on any environmental and sustainability claims about their product listings.

Importantly also, the Guidance indicates that retailers must ensure suppliers of products can back the claims made by retailers, which means suppliers providing evidence in the form of final scope certificates and final transaction certificates or other forms of declaration from suppliers that product information is accurate prior to the retailer offering the product for sale. The Guidance encourages retailers to do regular spot checks of relevant certificates and declarations and obtain confirmations from their suppliers that they will comply with relevant retailer policies and contractual terms regarding environmental claims. 

Finally, the Guidance reminds retailers that if they sell third-party branded products, they are responsible for ensuring any claims made about these third-party products are not misleading and that the retailers should have processes in place to carry out such checks (e.g. self-assessment questionnaires completed by third party product suppliers). Each business in the supply chain has a responsibility for ensuring that its claims are accurate and substantiated.

Other consumer-facing businesses

While the Guidance has been issued to the fashion industry, it expands upon the high-level principles set out in the CMA's Green Claims Code. Further, although the Guidance is not binding, it reflects the CMA's current position on environmental claims. It is therefore prudent for all consumer-facing businesses to review the Guidance and take this into account when reviewing their green claims and ensuring they are in compliance with all relevant consumer protection laws. 

ASA and CMA

Greenwashing claims are also being targeted by the Advertising Standards Authority ("ASA"), the industry's self-regulatory body that assesses advertisers' compliance with the UK's advertising codes which contain specific provisions addressing environmental claims.  Indeed, rules on environmental claims enforced by the ASA can be found in the Committee of Advertising Practice (i.e. CAP) and Code of Broadcasting Advertising (i.e. BCAP) Codes which govern non-broadcast and broadcasting advertising in the UK. Further, under a Memorandum of Understanding between the ASA and CMA, if the ASA identifies potential breaches of consumer protection legislation falling within the CMA's jurisdiction, the ASA will notify the CMA. This applies particularly to cases likely to cause harm to consumers. Therefore, companies should bear in mind the ability of the ASA to refer potential violations to the CMA for further investigation and enforcement. This increases compliance risk in this area for companies.

Final thoughts?

The CMA continues to make clear that promoting environmental sustainability and targeting greenwashing in the fashion industry is one of its top priorities. The Guidance, investigations underway by the CMA and undertakings given to date by organisations such as ASOS, Boohoo and Asda should be considered carefully by all businesses that advertise products to UK consumers. 

With the commencement of the DMCCA consumer regime powers in April 2025, businesses that fail to take appropriate steps to ensure compliance with the Guidance may well face enforcement action by the CMA.

It is therefore important that fashion businesses and other consumer businesses making greenwashing claims review their practices in line with the Guidance ahead of the consumer protection powers of the CMA coming into full force next year.

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