CMA have launched a “green claims code” – and consulting on environmental sustainability for business
The Competition and Markets Authority (CMA) has launched a consultation (29th September) “to help inform its advice to government on how competition and consumer regimes can better support the UK’s Net Zero and sustainability goals.” It ends on 10th November. The CMS has issued a ‘green claims code’ and says too many businesses falsely make environmental claims, to attract customers. The CMA held a consultation in May (ended 16th July 2021) on misleading environmental claims – ie. greenwashing. It has now told companies that they have until the end of 2021 to stop the practice. It has issued new guidance for companies, to support global efforts to reduce carbon emissions. In 2022, the CMA will launch a review of misleading green claims, with sectors including fashion, transport, and others. It began looking into green claims last year, finding that up to 40% could be misleading to consumers. At the same time, the Advertising Standards Authority is clamping down on companies that make misleading claims on climate impact.
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The Green Claims Code, by the CMA
https://greenclaims.campaign.gov.uk/
Green claims (sometimes called ‘environmental claims’ or ‘eco-friendly claims’) are claims that show how a product, service, brand or business provides a benefit or is less harmful to the environment.
Many businesses use green claims to help market their products or services. They do this through a range of methods such as: statements, symbols, emblems, logos, graphics, colours and product brand names.
Green claims MUST:
1. Be truthful and accurate: Businesses must live up to the claims they make about their products, services, brands and activities
2. Be clear and unambiguous: The meaning that a consumer is likely to take from a product’s messaging and the credentials of that product should match
3. Not omit or hide important information: Claims must not prevent someone from making an informed choice because of the information they leave out
4. Only make fair and meaningful comparisons: Any products compared should meet the same needs or be intended for the same purpose
5. Consider the full life cycle of the product: When making claims, businesses must consider the total impact of a product or service. Claims can be misleading where they don’t reflect the overall impact or where they focus on one aspect of it but not another
6. Be substantiated: Businesses should be able to back up their claims with robust, credible and up to date evidence.
See more at https://greenclaims.campaign.gov.uk/
The full guidance is at
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CMA: code introduced to force firms to prove green claims
By Household Money
28.9.2021
The Green Claims Code
The Competition and Markets Authority (CMA) has published the Green Claims Code, essentially a set of principles based on existing consumer law designed to help businesses to highlight their green credentials without misleading shoppers.
The code makes clear that any green claims must:
- Be truthful and accurate;
- Be clear and unambiguous;
- Not omit or hide important information;
- Only make fair and meaningful comparisons;
- Consider the full life cycle of the product;
- Be substantiated.
There’s a pretty clear message that comes through from all of these principles. Whenever a firm makes a claim about its environmental credentials or those of its products and services, then it needs to be able to back them up.
The claims themselves have to be clear, and not open to interpretation, with any relevant information included.
Evidently, the gauntlet is being thrown down to businesses of all kinds with this code ‒ you need to be able to back up your claims.
It follows an investigation by the CMA last year, alongside other authorities, which suggested that as many as 40% of green claims made by firms were potentially misleading.
https://www.lovemoney.com/news/116494/cma-code-introduced-to-force-firms-to-prove-green-claims
CMA consults on environmental sustainability advice
The CMA is calling for views to help inform its advice to government on how competition and consumer regimes can better support the UK’s Net Zero and sustainability goals.
The Secretary of State asked:
- Whether, and if so how, current legal frameworks restrict or block initiatives that might support the UK’s Net Zero and sustainability goals?
- Are there changes to the UK’s competition and consumer law that would help to achieve the UK’s Net Zero and sustainability goals?
- Are there other opportunities within the UK’s competition and consumer policy toolbox that would support the UK’s Net Zero and sustainability goals, which the government should be considering?
Before responding to the Secretary of State, the CMA is calling for views from all interested parties to ensure it provides government with informed advice. The CMA’s Call for Inputs document outlines the key areas in which it is seeking information – these are: competition law enforcement, merger control, consumer protection law, and market investigations. It is particularly interested in hearing about specific instances where businesses or consumers felt that competition or consumer law impacted their ability to act sustainably.
The Call for Inputs will be open until Wednesday 10 November 2021.
Sarah Cardell, the CMA’s General Counsel, said:
We welcome this opportunity to advise the government on these important issues, particularly as the UK prepares to host the COP26 conference.
More than ever, it is important that public bodies, businesses, non-governmental organisations and consumers consider their contribution to the achievement of the UK’s Net Zero and environmental sustainability goals. We want to make sure that the competition and consumer enforcement regimes are able to play their part too.
Supporting a wider effort to make our economy cleaner and greener is one of the CMA’s top priorities. That’s why we’re keen to hear from as wide a range of stakeholders as possible. This feedback will help shape the advice we give to the government.
Notes to editors
- The BEIS Secretary of State wrote to the CMA on 19 July 2021, requesting that it provide advice by early 2022.
- The advice the CMA produces will be published at a later date.
- For media queries, please contact the press office via press@cma.gov.uk or on 020 3738 6460.
https://www.gov.uk/government/news/cma-consults-on-environmental-sustainability-advice
Competition watchdog gives firms deadline on ending ‘greenwashing’
CMA issues ‘green claims code’ and says too many businesses falsely taking credit to woo customers
Ryanair is among businesses that have come under fire over greenwashing adverts.
By Rob Davies @ByRobDavies
Mon 20 Sep 2021
The UK competition watchdog has given companies that make misleading claims about their environmental credentials until the end of the year to stop the practice, which is known as “greenwashing”.
Too many businesses were “falsely taking credit for being green” in order to woo environmentally minded consumers, the Competition and Markets Authority said.
The CMA highlighted the upcoming Cop26 climate conference being hosted by the UK in Glasgow, and urged firms to adhere to new guidelines it published on Wednesday to support global efforts to reduce carbon emissions.
Starting in 2022, the regulator will launch a review of misleading green claims, with sectors including fashion, transport, the beauty industry and food and drink likely to face particular scrutiny.
The CMA began looking into green claims last year, finding that up to 40% could be misleading to consumers.
The Advertising Standards Authority has clamped down on several major companies in recent years over greenwashing adverts, including the airline Ryanair, the carmaker BMW and the oil producer Shell.
The CMA’s work will focus on whether companies’ claims breach consumer law, with the regulator saying any transgression could result in sanctions even before the review begins.
Its work will be underpinned by the new guidelines some have called the “green claims code”, which highlights six principles of behaviour companies should adhere to when making claims about the environmental impact of their products.
Among the CMA’s guiding principles are that firms “must not omit or hide important information” and “must consider the full lifecycle of the product”.
Greg Hands, the energy and climate change minister, said: “Millions of UK households are rightly choosing to switch to green products as they look to reduce their carbon footprint. But it’s only right that this commitment is backed up by transparent claims from businesses.
“The competition regulator’s new code will help to ensure this with advice on how best to communicate and understand environmental claims.
“Government is also reviewing green energy tariffs to ensure consumers can be confident they are choosing companies that make a conscious choice to invest in renewable energy.”
Andrea Coscelli, the chief executive of the CMA, said exaggerating green credentials could be an outright breach of consumer law, liable to lead to sanctions.
“More people than ever are considering the environmental impact of a product before parting with their hard-earned money,” he said. “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.
“Any business that fails to comply with the law risks damaging its reputation with customers and could face action from the CMA.”
Breaches of the relevant consumer protection legislation can carry a penalty of imprisonment for up to two years.
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See earlier:
‘Green’ claims: CMA sets out the dos and don’ts for businesses
The CMA has set out its views on the types of misleading environmental claims made about products that could break the law.
Last year, the Competition and Markets Authority (CMA) announced that it was investigating the impact of green marketing on consumers, in line with its annual plan commitment. As part of this, the CMA recently led on an analysis of websites – alongside other global authorities – which found that 40% of green claims made online could be misleading.
The CMA is now seeking views on draft guidance for businesses about ‘green’ claims. This is based on a careful review of how these claims are being made and how people respond to them. It explains the best way for businesses to communicate their green credentials, while reducing the risk of misleading customers.
This direction comes at a time when more than half of UK consumers take environmental considerations into account when buying products.
In particular, the proposed guidance sets out 6 principles that environmental claims should follow.
They:
- must be truthful and accurate: Businesses must live up to the claims they make about their products, services, brands and activities
- must be clear and unambiguous: The meaning that a consumer is likely to take from a product’s messaging and the credentials of that product should match
- must not omit or hide important information: Claims must not prevent someone from making an informed choice because of the information they leave out
- must only make fair and meaningful comparisons: Any products compared should meet the same needs or be intended for the same purpose
- must consider the full life cycle of the product: When making claims, businesses must consider the total impact of a product or service. Claims can be misleading where they don’t reflect the overall impact or where they focus on one aspect of it but not another
- must be substantiated: Businesses should be able to back up their claims with robust, credible and up to date evidence
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The CMA is inviting views on its guidance and is particularly keen to hear from anyone who buys or sells products which claim to be eco-friendly, including whether any further information is needed to help companies comply with the law.
The consultation will run until 16 July 2021, with the aim of publishing the final guidance by the end of September 2021. More information can be found on the CMA’s Misleading environmental claims web page.
Notes to editors.
- The key piece of consumer protection legislation relevant to the CMA’s guidance is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CPRs contain a general prohibition against unfair commercial practices and specific prohibitions against misleading actions or misleading omissions.
- The statistic that “half of UK consumers take environmental considerations into account when buying products” is taken from a 2014 European Commission Market Study.
- Related figures and statistics on this topic can be found in the CMA’s ‘Making environmental claims: a literature review’.
… and it continues ….
https://www.gov.uk/government/news/green-claims-cma-sets-out-the-dos-and-don-ts-for-businesses
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Stansted Airport Watch submits response to CMA consultation on greenwash; examples from Stansted and Ryanair
The Competition and Markets Authority (CMA), which regulates business behaviour, has finally stepped in to try to end ‘greenwashing’ and has asked for evidence. Greenwashing is where businesses make dubious claims in an attempt to boost their environmental credentials, and thus sell more product. The CMA consultation ended on 16th July. Greenwashing is all too common in the aviation industry and Stansted Airport Watch (SAW) submitted detailed evidence to the CMA relating to both Stansted Airport and Ryanair. Some of the examples of dubious claims by the airport are that it claims to be “carbon neutral”, but this conveniently ignores the carbon emissions from the aircraft (hugely higher than emissions by the airport itself). It also relies of “offsetting”, so making payments to some carbon reduction activity elsewhere, while itself continuing to emit. Ryanair has made a number of claims about being “green”, such as claims to be Europe’s “cleanest, greenest airline” but this has been ruled against by the Advertising Standards Authority, for being misleading (February 2020).
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