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CMA publishes final guidance on environmental claims used in advertising

Out-Law News | 27 Sep 2021 | 1:32 pm | 2 min. read

The UK’s Competition & Markets Authority (CMA) has published its long-awaited guidance on environmental claims made by businesses in advertising.

The detailed guidance note, known as the ‘Green Claims Code’, is accompanied by a short checklist and an instructive YouTube video.

The CMA said it would carry out a review of both online and offline claims – such as those made in store or on a product’s labelling – at the start of 2022, and would be ready to take action against offending advertisers.

The CMA said it would prioritise sectors where it believes consumers are most concerned about misleading claims, notably textiles and fashion, travel and transport, and fast-moving consumer goods. However, other sectors could also become a priority.

Intellectual property expert Tom Nener of Pinsent Masons, the law firm behind Out-Law, said: “This is a clear indication to businesses that the CMA intends to step up its enforcement efforts in respect of misleading environment claims. Businesses have a short window to review current and planned claims prior to the review commencing at the start of 2022 and to ensure that those claims are fully complaint with the Green Claims Code.”

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Tom Nener

Legal Director

It is now incredibly important for businesses to proactively engage with supply chains to truly understand the environmental impact of a product, service, process, brand or business

The Green Claims Code sets out six key principles which apply to green claims. Claims must be truthful and accurate; clear and unambiguous; and must not omit or hide important relevant information. Comparisons must be fair and meaningful; claims must consider the full life cycle of the product or service; and claims must be substantiated.

The CMA’s guidance is “for all businesses who make environmental claims” and applies equally to businesses that sell directly to consumers and businesses that sell to other businesses.

The code notes: “Claims may be made by manufacturers, wholesalers, distributors and retailers. The claims may be made about goods or services, or particular components or aspects of them. They may also be made about a process or a brand or business as a whole.”

Nener said this showed the CMA was taking a holistic approach to its review of claims made by businesses.

“This reinforces that businesses need to take into consideration the entire supply chain for a product or business when assessing whether a proposed environment claim is compliant or not. It is now incredibly important for businesses to proactively engage with supply chains to truly understand the environmental impact of a product, service, process, brand or business,” Nener said.

The guidance has not been published in conjunction with Trading Standards or the Advertising Standards Authority but Nener said it signalled an intent from all three regulators to step up enforcement action against misleading environmental claims.

The CMA recommended that businesses should check their green claims against the code and seek legal advice if they are unsure whether their claims comply with the law.

“Businesses must take steps to review their advertising for green claims compliance in advance of the CMA’s end of year deadline. However, businesses should be in no doubt that the CMA will take enforcement now in respect any advertising that is particularly egregious,” Nener said.

CMA chief executive Andrea Coscelli said the guidance was produced as more consumers were considering the environmental impact of a product. Coscelli said the regulator was concerned that too many businesses were falsely taking credit for being green, while genuinely eco-friendly firms were not getting the recognition they deserved.

The Green Claims Code is part of a wider profile-raising campaign which the CMA has launched in advance of the UN Climate Change Conference (COP26) to be held in Glasgow in November. It follows draft guidance which was published in May 2021.