Overlay
Sustainability

The clock is ticking for businesses to get green claims right

It’s important for businesses to note that they only have until the new year to make sure their environmental claims comply with the law.

The Competition and Markets Authority (CMA) has published its six-point Green Claims Code to help businesses understand how to communicate their green credentials while reducing the risk of misleading consumers.

Green claims (sometimes called ‘environmental claims’ or ‘eco-friendly claims’) show how a product, service, brand or business provides a benefit or is less harmful to the environment.  

This is usually via statements, symbols, emblems, logos, graphics, colours and product brand names.

In 2020, the CMA announced it was investigating the impact of green marketing on consumers after its global review of websites found 40% of green claims made online could be misleading – meaning thousands of businesses could be breaking the law.

ore people than ever are considering the environmental impact of a product before parting with their hard-earned money

Dr Andrea Coscelli
Chief Executive, Competition and Markets Authority

The CMA is providing a bedding-in period for businesses before it begins reviewing compliance. Its full review of misleading green claims, made both on and offline, will kick off at the start of 2022, and is intended to help businesses feel more confident about navigating the law when it comes to marketing their products, as well as protecting consumers from being misled.

What is the code?

The Green Claims Code focuses on the following six principles, based on existing consumer law:

  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. Do not omit or hide important information: Claims about a product must not prevent someone from making an informed choice because of information that’s been left 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: Businesses must consider the total impact of a product or service. Claims can be misleading where they don’t reflect the overall impact or focus on one aspect of it but not another
  6. Substantiate: Businesses should be able to back up their claims with robust, credible and up-to-date evidence
What happens next?

The CMA will be scrutinising sectors where consumers appear most concerned about misleading claims. These include textiles and fashion, travel and transport, and fast-moving consumer goods (food and beverages, beauty products and cleaning products).

However, any industry where the CMA finds “significant concerns” could become a priority.

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

“The Green Claims Code has been written for all businesses – from fashion giants and supermarket chains to local shops. Any business that fails to comply with the law risks damaging its reputation with customers and could face action from the CMA.”

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of the NatWest Group Economics Department, as of this date and are subject to change without notice.

scroll to top