CMA investigates ASOS, Boohoo and Asda over “greenwashing"

The question

What does the CMA’s investigation into eco-friendly and sustainability claims within the fashion world mean for advertising industry more generally?

The key takeaway

Like the ASA, the CMA is taking a very hard line when it comes to greenwashing. It’s investigation into the leading fashion platforms is a reminder to advertisers across all industries to take great care when translating their green marketing initiatives into reality.

The background

On 29 July 2022, the CMA announced that it is investigating ASOS, Boohoo and George at Asda in relation to potentially misleading claims that their fashion products, including clothing, footwear and accessories, are environmentally friendly and sustainable. The investigations are part of a wider investigation into greenwashing in the fashion industry, which will no doubt see the CMA putting other retailers under the microscope. The interim Chief Executive of the CMA stated that its work in the fashion sector has only just begun, and all fashion companies should ensure their practices are in line with the law. A failure to do so could see enforcement action taken against them, including through the courts. This all follows the CMA’s announcement in November 2020 of a wider investigation into greenwashing, and the publication of its Green Claims Code in September 2021 which aims to help businesses understand how to communicate their green credentials without misleading consumers.

The CMA investigation

At the start of this year, the CMA began an initial review around concerns of potentially misleading green claims being made by the fashion sector. Companies were found to be creating an impression that their products were “sustainable” or “eco-friendly”, with limited information about the basis for those claims or which products they related to. The investigation focuses on:

• whether the broad, vague statements and language used create the impression that clothing collections are more environmentally sustainable than they are
• whether the companies are using lower criteria to decide which products to include in these collections than customers might reasonably expect from their descriptions and overall presentation; for example, some products may contain as little as 20% recycled fabric
• whether items are being included in these collections which do not meet their purported environmental criteria
• whether customers are being provided with inadequate information about the products in their eco ranges; for example, a lack of information about what the product is made from
• whether the companies are making misleading statements about fabric accreditation schemes and standards; for example, providing insufficient clarity around whether the accreditations apply to particular products or their wider practices.

The CMA has outlined its concerns to the three companies and will be using its information gathering powers to obtain evidence to progress the investigation. There are several possible outcomes, including securing undertakings from the companies to change the way they operate, taking the companies to court, or closing the case without further action.

Why is this important?

If the CMA’s Green Claims Code and initial review of the fashion sector in relation to greenwashing wasn’t a strong enough indicator of their zero-tolerance approach to misleading environmental claims, these latest investigations into some of the fashion sector’s largest players surely is. At a time where brands across the spectrum are focussing more and more on the sustainable nature of their businesses as a means of engaging with an increasingly environmentally conscious consumer base, all of them now need to tread very carefully when making a “green” claim. Expect other sectors to come under the CMA’s review in due course.

Any practical tips?

Businesses in the fashion sector should take great care to avoid broad and vague statements and language designed to create the impression that their products are more environmentally friendly than they are. They should also adopt a reasonably high standard of criteria when selecting products to use in “sustainable” collections and ensure no products are included in these collections that fall below that criteria. Finally, they should include sufficient information about the products themselves and be clear about the application of accreditation schemes and standards in relation to their products.

On a cross industry level, all industry players need to take a good hard look at their existing sustainability advertising and planned green initiatives. The most common trap to fall into is making too broad an “eco-friendly” style statement which fails to consider the “full lifecycle” of the product or service, and which is in turn impossible to substantiate. We all dream of a greener world. Just be careful not to let those dreams translate in a business context into broad, misleading marketing claims which could lead to a very public, PR-damaging slap on the wrists by the CMA or the ASA.

Autumn 2022