UK competition watchdog puts businesses on notice over greenwashing claims

UK – Businesses in the UK have until the end of the year to ensure their environmental claims comply with the law, otherwise, they risk being charged, the UK Competition and Markets Authority has revealed. 

Environmental claims are claims which suggest that a product, service, process, brand, or business is better for the environment, according to the CMA.    

They include claims that suggest or create the impression that a product or a service has a positive or no impact on the environment. 

Environmental claims are genuine when they properly describe the impact of the product, service, process, brand or business, and do not hide or misrepresent crucial information.  

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Misleading environmental claims occur where a business makes claims about its products, services, processes, brands, or its operations as a whole, or omits or hides information, to give the impression they are less harmful or more beneficial to the environment than they really are. 

By way of an example, to be labeled as organic, food products must be made from at least 95% organic ingredients.

Labelling foodstuffs ‘organic’ when they contain fewer organic ingredients would be both illegal under food standards legislation and misleading advertising under consumer protection law. 

According to the CMA, businesses in a host of sectors including food and beverages were making unsubstantiated green claims – a practice now described as greenwashing- to the disadvantage of undiscerning consumers. 

The authority revealed that last year, 40% of green claims made online from companies in a host of sectors, including food and beverage, could be misleading. 

“More people than ever are considering the environmental impact of a product before parting with their hard-earned money,” Andrea Coscelli, Chief Executive of the CMA, said. 

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“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.” 

 To protect consumers from deception, the CMA has published a ‘Green Claims Code’ to help businesses ensure their green claims do not deceive their customers.   

It is hoped the new Green Claims Code will ensure that businesses feel confident navigating the law in this area.  

“We hope it will give confidence to those businesses whose products are genuinely ‘green’ to provide consumers with the information they need to make informed decisions,” the CMA said.  

It makes it clear that firms making green claims “must not omit or hide important information” and “must consider the full life cycle of the product”. 

Businesses have until the New Year to make sure their environmental claims comply with the law or risk being charged by the market regulator.  

CMA has pledged to carry out a full review of misleading both on and offline green claims (e.g. claims made in store or on labelling) at the start of 2022 and said it stands ready to take action against offending firms. 

“Any business that fails to comply with the law risks damaging its reputation with customers and could face action from the CMA,” Coscelli promised. 

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