CMA pushing for more powers on sustainability

17 March 2022. Published by Ciara Cullen, Partner and Sophie Tuson, Senior Associate

Following its public consultation, the CMA has published its advice to government on how competition and consumer laws can help meet the UK's environmental goals.

Some key points:

  1.  The CMA's view is that a new legislative framework is not required to help the UK achieve its sustainability targets, instead suggesting changes to the existing framework which are aimed at improving clarity for businesses.

  2. The CMA wants standard legal definitions for commonly-used but vague environmental terms – for example 'sustainability'/'sustainable'.  At present, it is ambiguous as to what 'sustainable' means, which is why the CMA advises avoiding using the word when marketing products as it is likely to mislead consumers.

  3. The CMA supports mandatory disclosure of more environmental information about products and materials. This applies both in the context of sales to consumers, but also business to business. This is part of a general push from the CMA to improve supply chain transparency, and to address the problem where green claims are passed along a supply chain, but the retailer (being at the end of the chain) is left on the hook (often without the means to substantiate those claims).

  4. The CMA wants stronger enforcement powers. In particular, it once again raised the proposal that it be allowed to declare businesses in breach of consumer law – and administer fines accordingly – without the need to go to court. The CMA also suggested that existing remedies available to the court be enhanced so that courts can order additional redress under the Enterprise Act 2002.

From a retailer and brand perspective, the takeaway point is that this advice signposts the future legislative trajectory for those that want to make environmental claims about their products.  It is no surprise that the CMA is seeking additional powers: its significant activity in this space demonstrates that environmental marketing claims are a key concern, and will be for months and likely years to come. Just earlier this month, the CMA outlined plans to "name and shame" the worst greenwashing offenders in the fashion industry, demonstrating its commitment to this issue.

We will be focussing on this topic in detail in the upcoming edition of Retail Compass which will be published next month – watch this space!

If you have any comments or questions in the meantime, please contact Ciara Cullen or Sophie Tuson.

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