Green claims form the focus of CMA investigation into Unilever

The question

Will Unilever be the first big FMCG brand to be found to be making misleading green claims by the CMA?

The key takeaway

The Competition and Markets Authority (CMA) continues its focus on green claims as it names Unilever the first business to be under specific investigation following the opening of its market wide scrutiny into the use of green claims in relation fast-moving consumer goods (FMCG) products.

The background

In January 2023, the CMA announced that it was looking into possible breaches of consumer protection legislation regarding misleading environmental claims in the FMCG sector. This builds on previous investigative work into “greenwashing”, that focussed on the fast fashion sector (an investigation opened in June 2022 in respect of brands ASOS, Boohoo and George by Asda).

The development

Following its preliminary review of FMCGs throughout 2023, on 12 December 2023, the CMA announced a number of practices worthy of further examination and a specific focus on brands owned by Unilever (such as Cif, Dove, Comfort, and Lynx).

These practices include whether:

• “certain statements and language used by Unilever appear vague and broad, and may mislead shoppers regarding the environmental impact of those products;
• claims about some ingredients are presented in a way that may exaggerate how “natural” the product is, and so may create an inaccurate or misleading impression;
• claims focusing on a single aspect of a product may suggest it is environmentally friendly as a whole;
• certain green claims – particularly in relation to recyclability – may be unclear, as they fail to specify whether they relate to all or part of a product, or packaging; and
• Unilever’s use of colours and imagery – such as green leaves – may create the overall impression that some products are more environmentally friendly than they actually are.”

The CMA now enters an evidence-gathering stage with Unilever and will decide a course of action after reviewing its findings.

Why is this important?

The announcement only marks the beginning of the CMA’s investigation into Unilever. Whilst the CMA is not currently investigating other companies in this arena, there is scope for such work in the future.

The CMA has significant investigative powers and will be taking up enhanced enforcement powers in the not-too-distant future, once the Digital Markets, Competition and Consumers Bill receives royal assent and comes into force. With the ability to make decisions itself on whether breaches of consumer protection law have taken place, the CMA is set to become a genuine force for change when it comes to tackling misleading green claims. The much-heralded ability of the CMA to impose fines of up to 10% of global annual turnover are enough to make any large multi-brand firms think twice before making lofty or unclear claims about its or its brands’ environmental credentials.

Any practical tips?

The CMA has honed in on a number of “concerning practices” that Unilever brands may be using to give the impression that a product is environmentally friendly. All companies making green claims should ensure they seek legal advice to ensure their claims are clear and can be substantiated. Whilst fast fashion and now FMCG products occupy the current spotlight, it’s likely that other sectors will find themselves subject to further scrutiny by the CMA and/or the ASA when it comes to misleading environmental claims.

Spring 2024