In September 2021, the CMA released the Green Claims Code, which contains guidance aimed at helping businesses understand and comply with their existing consumer protection obligations when making environmental claims. For further information on the Green Claims Code, please see our previous blog post here. As part of its ongoing work in this area, in July 2022, the CMA launched an investigation into fashion brands ASOS, Boohoo and George at Asda, scrutinising their green claims in marketing products to consumers (the investigation is ongoing).
On 26 January 2023, the CMA announced it is expanding its scrutiny of misleading green claims to the fast moving consumer goods (FMCG) sector, and intends to examine a wide range of essential products such as food and drink, cleaning products, toiletries, and personal care items. According to the CMA, problematic claims include the use of vague and broad eco-statements (e.g. packaging or marketing a product as “sustainable” or “better” for the environment with no evidence); misleading claims about the use of recycled or natural materials in a product and how recyclable it is; or entire ranges being incorrectly branded as “sustainable”. The CMA also intends to continue its wider review in relation to other sectors.
Although it has not yet reached a view regarding any breaches of consumer protection law in the FMCG sector, the CMA will consider taking enforcement action using its formal powers if it uncovers evidence suggesting green claims could be unfounded (for example, opening an investigation into specific companies). The CMA also notes that its work to date has shown there could be greenwashing in the FMCG sector, and it encourages businesses to review their practices to make sure they are operating within the law.
Where the CMA concludes that breaches of the Consumer Protection from Unfair Trading Regulations 2008 have occurred, it may secure undertakings from the relevant companies to change the way they operate, or apply for an enforcement order from a civil court. Once the Digital Markets, Competition and Consumer bill is adopted (see our previous blog post here), the CMA will also have direct enforcement powers, and will be able to impose fines on companies found to have engaged in greenwashing.
For further information, please contact:
Susan Black, Partner, Herbert Smith Freehills