In a bid to tackle greenwashing, the Competition and Markets Authority (CMA) has published its Green Claims Code to help businesses communicate their eco credentials without misleading consumers.
But it doesn’t stop there.
Businesses have until the New Year to make sure their claims comply with the law or face action as part of the CMA’s new crackdown.
The Code, which highlights six principles based on existing consumer law, is part of a wider awareness campaign ahead of COP26 in Glasgow this November. Here’s what it entail
What is the Green Claims Code?
The Green Claims Code was introduced to help businesses feel confident about navigating the law on eco credentials. It also arose out of concern over consumers potentially being misled over environmental claims.
Many businesses use eco credentials or make eco-friendly claims to market their products as less harmful to the environment.
However, recent international analysis coordinated by the CMA found that as much as 40% of firms’ green claims could be misleading. This means thousands of businesses could be hurting their reputation or even worse, breaking the law.
Andrea Coscelli, Chief Executive of the CMA, says: “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.”
“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 six principles of the Green Claims Code
All businesses must comply with the six principles below when making any eco-friendly claims:
1. Businesses should be truthful and accurate about their products, services, brands and activities.
2. All product messaging and credentials should be clear and unambiguous for the consumer.
3. Businesses should not hide or omit important information that could prevent a consumer from making an informed decision.
4. Any products compared must be intended for the same purpose or meet the same needs.
5. Businesses should consider the total impact of a product or service from beginning to end.
6. All claims must be substantiated with robust, credible and up to date evidence.
What industries will be scrutinised?
The CMA will start to carry out a full review of misleading green claims at the start of 2022. This will include any claims made in store, online, offline and on product labelling.
Over the coming months, the CMA will make a plan of the sectors it wants to prioritise first which will most likely be the ones that consumers feel most concerned about.
These include fashion and textiles, travel and transport and fast moving consumer goods (beauty products, food and beverages and cleaning products).
Greg Hands, Minister of State for Energy and Clean Growth, says: “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.”
“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.”
How can you ensure your business complies with the law?
The Green Claims Code is designed to help businesses of all sizes. The CMA advises businesses owners to check their green claims against the Code to make sure they’re on the right side of the law.
If in doubt about any claim, seek legal advice.
To learn more about the Green Claims Code and how it can affect your business, visit the website here.
