CMA urges green economy to provide feedback on its anti-greenwashing guidelines

Businesses across the UK have less than two weeks to have their say on the Competition Markets Authority (CMA) sweeping new anti-greenwashing guidelines, and the watchdog has urged firms from across the economy to get involved in its push to crackdown on misleading environmental claims.

The guidance, which was published in draft form in late May, states that all environmental claims made by businesses must be truthful and accurate; clear and unambiguous; include all relevant information; only make fair and meaningful comparisons; consider the full lifecycle of the product; and be substantiated by robust, credible, and up to date evidence.

In an interview with BusinessGreen, the CMA's director of consumer Cecilia Parker Aranha urged companies and consumers alike to contribute to the consultation on the guidelines, arguing their input will help ensure the guidance is as robust as possible and can meet its twin aims of protecting consumers and ensuring a level playing field for businesses.

"This is an issue that really matters to consumers," she said. "We want businesses to get it right because we don't want consumers to be misled… We also want to help support the businesses that are doing the right thing, and we want to give them the confidence to make the claims about their products when they are true. We don't want them being harmed by an unlevel playing field where some are greenwashing and others are actually doing their best to get it right."

While the guidance is designed to apply to all parts of the economy - and the CMA intends to work closely with sectoral regulators on enforcing it - Parker Aranha conceded there are some sectors where 'greenwashing' is perceived to be a bigger issue.

"The guidance will apply to everybody, as the underlying [consumer protection] regulations do," she said. "But the areas where we've seen the most interest are the fashion sector and personal and household items - so fast moving consumer goods, personal toiletries, makeup and household cleaning products. Energy is also an area that's that's very important to people."

The CMA intends to finalise the guidance in September, when it will embark on a major campaign across the business sector to drive awareness of the guidelines. After that, it plans to embark on a "compliance review" in select sectors, during which the watchdog will scrutinise branding and advertising of online and physical products to check they are in line with the guidance.

"Typically, we will start with an information gathering phase, and in this case, that will mean asking companies for the evidence that their claims are substantiated," Parker Aranha said. "We will also look at how things are presented, and how consumers are understanding the claims that are being made. So even if something is technically backed up by evidence, if it is phrased in such a way that a consumer is taking a different interpretation of it, then there might still be a problem."

She predicted the compliance review phase could be lengthy, noting that comparable projects by the CMA - for instance its ongoing project to tackle misleading online reviews - had lasted for  several years. Firms that are found to be breaching the guidance will face action from the CMA, which has enforcement powers under consumer protection law.

"My expectation is that the CMA will be taking cases on greenwashing sooner rather than later," she said. "Obviously, from a tax payer perspective, from a consumer perspective, it's a lot better if businesses can work to put things right rather than wait for the CMA to come and knock on the door."

Parker Aranha added that businesses "need to need to think carefully" about ensuring their environmental claims stand up to scrutiny. "[Misleading environmental claims are] having an impact on consumer choice and on consumer trust," she said. "And ultimately, if we are all trying to do the right thing for the climate emergency, then making sure that you are not misleading consumers and you are not greenwashing is going to be very important for the for the coming years."

She added that the anti-greenwashing probe had been designed in part to help the UK meet its climate goals. "Clearly there's a need to to change the way that we are doing things in order to meet bigger climate goals," she said. "Anything that acts as an obstacle to us doing that has to be has to be a bad thing."

The CMA is also co-leading a project alongside the Authority for Consumer and Markets (ACM) in the Netherlands for the International Consumer Protection Enforcement Network, which is aiming to publish high-level guidance for businesses that could help to set consistent global expectations on the accuracy of environmental claims.

Parker Aranha said international co-operation was crucial, because ultimately the UK operates as part of a global economy and consumers will be affected by advertising and marketing standards in other markets. "We've got products traveling all over the world from UK businesses to the outside and from international businesses into the UK," she said. "Its important to know that most consumer protection enforcement authorities around the world are on the same page as far as this is concerned."