CMA combats greenwashing with Green Claims Code
Earlier this week the Competition and Markets Authority published its much anticipated Green Claims Code aimed at companies that make misleading claims about their environmental credentials. Jorja Knight, Head of Legal at PromoVeritas, explores what brands must do to get their green claims right in the future.
The CMA has launched its Green Claims Code to crack down on brands claiming they are more eco-friendly than they are in reality. Andrea Coscelli, the Chief Executive of the CMA said “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.”
A few days later the Advertising Standards Authority (the ASA) also released a statement on the regulation of environmental claims and issues in advertising, recognising the government’s ‘new and ambitious targets’ and what steps they will take in order to align their rules with the Green Claims Code. It seems very clear that brands need to reassess their sustainability marketing claims carefully in future to avoid reputational damage and public mistrust.
What are green claims?
Green claims are simply those which suggest a product, service, process, brand or business is better for the environment. They become misleading when businesses claim that they are less harmful or more beneficial to the environment than they really are. A recent global review of randomly selected websites conducted by the CMA found that 40% of green claims made online could be misleading consumers; hence the need for the Code and for businesses to get their claims right.
What is the Code?
The Code consists of six Principles that the CMA have introduced to help businesses stay on the right side of the law by ensuring that their claims must;
- Be truthful and accurate – businesses must live up to all claims made about their products, services, brands and activities;
- Be clear and unambiguous – consumers should be able to understand the claims you are making, the terms used in a claim should be clear;
- Not omit or hide important information – consumers must be given the full picture to be able to make an informed choice;
- Only make fair and meaningful comparisons – products being compared should meet the same needs or be intended for the same purpose;
- Consider the full life cycle of a product – think about its overall impact, from creation to disposal.
- Substantiate any claims made – all claims should be backed up with up with robust and credible evidence;
Are there any sanctions?
Yes. And they are serious ones; If businesses don’t comply with consumer protection law, the CMA and other bodies can bring court proceedings. The ASA could also act against misleading advertisements that contravene the CAP or BCAP Codes. Andrea Coscelli, Chief Executive of the CMA said, “Any business that fails to comply with the law risks damaging its reputation with customers and could face action from the CMA.”
The CMA will begin reviewing misleading green claims at the beginning of 2022, allowing businesses to review their current claims and alter their practices however they may act before the formal review process has begun in cases where there is clear evidence of breaches of consumer law.
What should brands do now?
January 2022 does not leave much time to resolve your compliance issues and the CMA have said that they might even act sooner. To avoid the risk of breaching the new Code here are some steps that businesses should be considering now;
Check your existing claims
The visual presentation e.g. the logos, images, colours and labels used all need to be considered as well as claims such as ‘organic ‘ or ‘net zero’ are claims that must be substantiated properly.
Make evidence easier to find
Give customers the full picture by linking to QR codes and links online to pages where full ingredient lists, or material information can be provided in one click.
Put your money where your mouth is!
Brands can no longer rely on just a few environmental positives to keep them in ‘the green’. This is easier said than done but if the environment is an important aspect of your brand’s purpose then it might be time to reconsider the processes, materials and impact of your brand and how to improve them.
In line with the CMA’s advice urging businesses to check their claims against the Code PromoVeritas can offer legal advice and support with some aspects of following the Code. The PromoVeritas Legal Team can help in a number of ways to ensure that the January 2022 deadline can be met.