On 18 September 2024, the UK’s Competition and Markets Authority (CMA) published new guidance to explain how fashion retail businesses can navigate their obligations under the UK’s Consumer Protection from Unfair Trading Regulations 2008 and the Green Claims Code when making environmental claims.
The guide’s ‘practical advice’ specifically focuses on how businesses which make environmental claims about clothing, footwear, fashion accessories and related services (e.g., packaging and delivery) can ensure these claims are clear and accurate.
Enforcement action for failure to do so is front and centre for the CMA. Indeed, on the very same day the guidance was published, the CMA confirmed that it had issued further warnings to 17 fashion brands for possible greenwashing. Together with the pending consumer enforcement provisions under the Digital Markets, Competition and Consumers Act 2024 carrying possible fines of up to 10% of worldwide turnover and a global trend towards more stringent green claims legislation, the stakes for noncompliance are increasingly high for brands that make green claims.
Time is short for fashion retail businesses to review their environmental claims and take steps to shore up the accuracy and transparency of consumer communications, so read on for our key takeaways and get in touch if you have any questions.
Background
The new guidance draws on the CMA’s conclusions from its recent investigation into three fashion retailers that – without any admission of wrongdoing or liability – entered into undertakings with the CMA committing to making only accurate and clear green claims (see Cooley’s May 2024 summary). The CMA’s annual plan for 2024 – 2025 made clear that environmental sustainability remains a policy and enforcement priority, and the recent warnings issued to fashion brands indicates that these early investigations may lead to wider enforcement action in the near future.
Key takeaways from the guidance
Companies are responsible for any claims made relating to their own products and/or third-party products they sell and must satisfy themselves that such claims are clear, accurate and not misleading, regardless of whether the claim is made on a product (including a label), in advertising, in store or online. This includes content communicated by a business on a company website or app, or even on a third-party platform, for example, via social media.
- Don’t hide important information. This includes ensuring claims and explanatory information – including any qualifications – use plain, accurate language which is clearly visible. Accompanying information must be presented close to the environmental claim made and generally cannot require further action (e.g., following a hyperlink or scanning a QR code).
- Avoid unclear terms. Broad or absolute claims, such as ‘green’, ‘sustainable’ or ‘eco-friendly’ are only suitable if the product as a whole has a positive environmental impact, or at least no adverse impact, which can be substantiated. In general, unless supported by evidence, companies should avoid such terms for individual products and product ranges.
- Avoid misleading imagery and icons. Logos, icons and imagery alone may give the impression of, or reinforce, misleading impressions of a product’s impact on the environment. Companies should pay particular attention to the overall impression of their marketing campaigns and communications and consider whether more information is needed to explain the logo, icon or imagery used.
- Only make clear comparisons. Comparisons must be like-for-like, clear, fair and provide consumers with sufficient information so that they can make an informed choice about competing products or businesses.
- Be clear what actions a consumer must take. Any claim that requires consumer action (e.g., specific disposal instructions) to realise the positive environmental attribute must be clearly stated.
- Be clear when using filters and other navigational tools. Navigational tools (e.g., filters based on environmental credentials) must be used in a way which does not mislead consumers. The tools themselves are required to clearly indicate the environmental criteria which apply, and the products they identify must meet said criteria.
- Be clear which claims relate to which fabrics and what these claims are. Companies should avoid subjective terms like ‘responsible cotton’ and instead refer to the objective properties of the fabric, e.g., ‘organic cotton’. Where claims relate to the use of a specific fabric, the specific, or minimum percentage of relevant fibres, must be set out clearly. Where a product is not made entirely of a single fabric or entirely ‘recycled’, that also must be clear. Certain components (e.g., buttons, zippers and threads) can be excluded from this assessment.
- Be clear about affiliations and accreditations. Companies should be careful not to mislead consumers when referring to affiliations or accreditations that do not specifically relate to the product. When substantiating environmental claims based on such affiliations/accreditations, companies should – among other things – be clear which claims are covered, whether they relate to a specific part of the product’s life cycle, and reference where further information can be found. Similar requirements also have been recently introduced in the European Union via the Empowering Consumers for the Green Transition Directive.
Above all, companies must establish internal processes to ensure that all environmental claims made are accurate and not misleading, including through the implementation of appropriate policies, regular staff training, and systems to verify product listings are correct and marketing materials compliant. When relying on supplier claims, these should be backed up with evidence (e.g., final scope or final transaction certificates), with spot-checks along the supply chain deemed good practice.
