CMA to publish “greenwashing” guidance in Autumn 2021

The question

What measures will regulators introduce to prevent businesses from misleading consumers about their products’ “green” credentials?

The key takeaway

The Competition and Markets Authority (CMA) will issue its final guidance on how to avoid “greenwashing” in August or September 2021. With increasing interest in brands’  environmental credentials, marketing and legal teams should ensure they get to grips with the guidance in good time, in particular its six core principles, which include a focus on ensuring substantiation with credible and up to date evidence of any eco-friendly claims.

The background

The CMA first launched its investigation into how consumers can be protected from misleading green marketing campaigns in November 2020. So-called “greenwashing” occurs when unsubstantiated claims are made about a product’s ethical credentials to deceive consumers. The investigation followed increased concerns that the recent boom in consumption of environmentally friendly and ethical goods might encourage businesses to make false promises about how green their products really were. 

The investigation focused on: 

• how claims about the environmental impact of products are made
• whether these claims can be substantiated with evidence
• to what extent these claims influence people to purchase products, and
• whether consumers are misled by a lack of information on a product’s environmental impact.

Behaviours such as exaggerating a product’s environmental impact or using misleading packaging for a product were highlighted by the CMA as issues with greenwashing. 

In May 2021, draft consumer protection law guidance was published along with a call for responses from interested parties. The CMA’s consultation ended on 16 July 2021.

The development

Following its consultation this summer, the CMA will issue its final guidance in August or September 2021. The draft guidance will set out six principles designed to help businesses make environmental claims while complying with existing consumer protection law. Businesses are advised that any claim made about a product or service’s environmental credentials must:

• be truthful and accurate
• be clear and unambiguous
• not hide important information that would prevent a consumer from making an informed choice
• make only meaningful comparisons
• consider the total impact of a product across its life cycle, and 
• be substantiated with credible and up to date evidence.

The guidance will focus on UK marketing practices, but the CMA is also looking to be a leader in investigating green product claims being made globally, particularly where the products are for sale to UK consumers.

Why is this important?

At present, the six principles are likely to be issued as guidance aimed at helping businesses to avoid greenwashing their products. However, following a joint investigation with the International Consumer Protection Enforcement Network in February 2021, the CMA suggested that it would act against businesses that makes misleading sustainability claims. 

Any business looking to promote products on the basis that they are good for the planet should therefore pay close attention to the new guidance when it is published.

Any practical tips?

Even before the guidance is published, it would be wise to consider the CMA’s six principles for compliance before making any claim about a product/service’s green credentials, including:

• be transparent in the language you use
• don’t hide information, and
• if you’re making a specific claim about the product, make sure you have the evidence to back it up.