Who: Competition and Markets Authority (CMA)
Where: United Kingdom
When: 21 May 2021
Law stated as at: 2 June 2021
Following an investigation into the impact of green marketing on consumers, the CMA consulted on draft guidance for businesses on misleading environmental claims.
As part of its investigation and in conjunction with The Netherlands Authority for Consumers and Markets and the International Consumer Protection and Enforcement Network, the CMA recently co-ordinated a global review of randomly selected websites, which revealed that 40% of green claims made online could be misleading consumers.
Examples of such misleading behaviour included:
- Vague claims and unclear language including terms such as “eco” or “sustainable” or reference to “natural products” without adequate explanation or evidence of the claims.
- Own brand eco logos and labels not associated with an accredited organisation.
- Hiding or omitting certain information, such as a product’s pollution levels, to appear more eco-friendly.
The CMA’s draft guidance in the consultation set out the best ways for businesses to communicate their green credentials while reducing the risk of misleading customers. In particular, it sets out six principles that environmental claims should follow. Claims must:
- 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.
Why this matters:
According to a 2014 European Commission Market Study, more than half of UK consumers take environmental considerations into account when buying products. As awareness of environmental issues increases, a growing number of products and services are being marketed as environmentally friendly.
The CMA invited views on its guidance, and is particularly keen to hear from anyone buying or selling products that claim to be eco-friendly, including on whether any further information is needed to help companies comply with the law.
The consultation closed 16 July 2021, and the CMA aims to publish its final guidance by the end of September 2021. More information can be found on the CMA’s Misleading environmental claims web page.