Going Green – The CMA set to investigate the fashion industry for greenwashing

Greenwashing is the term given to any false, misleading or vague statement which conveys a false impression about how a company’s products are more environmentally friendly. It is considered an unsubstantiated claim to deceive consumes into believing that a company’s products are environmentally friendly. Companies engaged in greenwashing typically exaggerate their claims or the benefits in an attempt to mislead consumers. This is in breach of the Advertising Standards Agency’s Non Broadcast Code, otherwise known as the CAP Code.

The Competition and Markets Authority (CMA) announced recently its investigation into big fashion retailers ASOS, Boohoo and George at Asda for potentially misleading claims when marketing products as environmentally friendly. This update comes as a development of the CMA’s original investigation back in 2020 where they looked at how products and services were being marketed as being sustainable and the effects these claims have on consumer behaviour. It also follows from the Advertising Standards Authority (ASA) statement released in 2021 where they announced a commitment to ensuring regulations remain fit for purpose.

The fashion industry is estimated to have £54 billion spent by consumers each year and the CMA are conscious that inaccurate claims about sustainability are encouraging people to purchase products under false pretences. The CMA’s criteria for this new investigation include assessing the following:

• Whether the statements are too vague and are leading consumers to think products are more sustainable than they are;
• The criteria for products to be included in environmentally friendly ranges being lower than a user might think;
• The lack of information as to what the products are made from;
• The statements about fabric accreditation schemes and standards might refer to the businesses wider practices rather than to specific products/ranges; and
• Whether some items do not meet the criteria at all.

Any outcomes will depend on what the CMA’s investigation brings to light, but it is possible they might include taking firms to court or forcing companies to change the way in which they operate to give consumers more clarity on what they are buying. Similarly, it is feasible that it will become obligatory for other fashion brands to alter the ways in which they advertise their products as being sustainable.

The Chief Executive of the CMA has stated that this is only the beginning of the work that will be undertaken in the fashion industry and therefore it is critical that all companies are making sure their practices align with the legal requirements. If we can assist with ensuring your marketing messages are compliant, please contact the Commercial and Technology team at [email protected].