CMA issues UK fashion sector greenwashing guidance

The practical guidance (20 pages / 2.7 MB) comes amid increasing consumer demand for products and services which minimise harm to, or have a positive effect on, the environment. Businesses must ensure that customers are able to make informed choices about products and services prior to purchase. Firms must work to avoid making untrue or misleading green claims, known as ‘greenwashing’.

The new guidance is part of the CMA’s broader consumer protection enforcement efforts to tackle misleading claims about the environmental credentials of good and services. It is based on the CMA’s Green Claims Code (56 pages / 505 KB), which sets out six overarching principles for businesses to follow when making environmental claims.

These principles are designed to ensure claims are truthful, clear, and not misleading. For example, businesses must ensure that claims are based on evidence and can be substantiated. Claims must also be clear and unambiguous to ensure customers can properly understand them. Businesses must also avoid hiding or omitting important information, with any comparisons made within the claims to be fair and meaningful. Claims must also consider the full life cycle of the product and be able to be substantiated with evidence.

The CMA document is relevant to all businesses which make claims about clothing, footwear and fashion accessories as well as related services such as packaging, delivery and returns. It aims to provide businesses with practical advice to help them comply with the principles of the code and with the consumer protection law which underpins it, to ensure that consumers are not misled and to help create a level playing field for fair dealing businesses in the fashion sector.

The guidance also draws on the conclusions from the CMA’s recent consumer protection investigation which led to three fashion businesses giving formal commitments to make certain changes to the way they made environmental claims. The CMA found that some claims were vague, lacked substantiation, or were potentially misleading.

Tadeusz Gielas, competition and consumer law expert at Pinsent Masons, said: “This latest guidance builds on the CMA’s longstanding efforts to tackle misleading environmental claims in various sectors, and its practice of issuing guidance tailored for specific business conduct or sectors which reflect learnings from the CMA’s own enforcement actions. Once the CMA’s powerful new direct enforcement consumer protection powers come into force from April 2025, the potential consequences of breaching UK consumer protection laws – such as through greenwashing claims or other types of misleading actions or omissions – can be substantially more serious for businesses and individuals involved. It is important that businesses are aware of the CMA’s latest guidance to help minimise their risk exposure under UK consumer protection law.”

The new CMA guidance applies to claims made about a ‘product’ – which includes services, processes, brands, and businesses, as relevant – in advertising, in store, or online. This includes information on a business’ own website or app as well as on a third-party site or app, for example, on social media. It also includes information on the actual product itself such as its label or packaging.

Fashion firms are advised to keep language plain, presenting green claims in an easily identifiable way. Any claims made should be clearly visible, not hidden within other promotions, banners or popups online, and should not require customers to take further steps, for instance scanning a QR code or following a link, to fully understand the information.

In addition to the guide, the CMA has advised 17 well-known fashion brands to review their business practices. In letters sent to these brands, the CMA highlights the areas of concern regarding their green claims, including the use of broad or general terms and whether certain products are being incorrectly included in “eco” ranges.

The letters also serve as a reminder to firms of the CMA’s soon-to-be strengthened consumer protection powers under the Digital Markets, Competition and Consumers Act 2024 (DMCC),  which will come into effect in April 2025. These powers will enable the CMA to fine businesses up to 10% of their worldwide turnover for breaches of consumer law and place CMA-enforced consumer protection law on a par with competition law.