The Competition and Markets Authority (CMA) has set out its views on the types of misleading environmental claims made about products, including food and cleaning lines, that could break the law.
The move comes after the regulator announced last year that it was investigating the impact of green marketing on consumers. As part of this, the CMA recently led an analysis of websites, which found that 40% of green claims made online could be misleading.
The CMA is now seeking views on draft guidance for businesses about ‘green’ claims. This is based on a review of how these claims are being made and how people respond to them. It explains the best way for businesses to communicate their green credentials while reducing the risk of misleading customers.
The direction comes at a time when consumers are increasingly taking environmental considerations into account when buying products.
The competition watchdog gave some examples of what claims could be misleading.
These included a loaf of bread being labelled as ‘Organic Sourdough’. Sector-specific rules mean food products must be made from at least 95% organic ingredients to be labelled as organic. A claim would be misleading if that threshold is not met.
Another example is a company selling toiletry products with a green banner across the corner of the image stating, ‘save our seas – these are microbead free’. This is likely to be misleading as it suggests a benefit in comparison to other products, when in fact microbeads are banned in the UK and should not be in any products.
The CMA’s proposed guidance sets out six principles that environmental claims should follow:
- Must be truthful and accurate: Businesses must live up to the claims they make about their products, services, brands and activities
- Must 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
- Must not omit or hide important information: Claims must not prevent someone from making an informed choice because of the information they leave out
- Must only make fair and meaningful comparisons: Any products compared should meet the same needs or be intended for the same purpose
- Must consider the full life cycle of the product: When making claims, businesses must consider the total impact of a product or service. Claims can be misleading where they don’t reflect the overall impact or where they focus on one aspect of it but not another
- Must be substantiated: Businesses should be able to back up their claims with robust, credible and up to date evidence
“Whether it’s buying clothes, cosmetics or cleaning products, more people than ever are trying to make choices which are better for the environment,” said Andrea Coscelli, Chief Executive of the CMA.
“Many businesses are already doing the right thing by being clear and upfront about how green a product really is, but that’s not always the case. We’re concerned that people are paying extra for so-called ‘eco-friendly’ products and those businesses which are genuinely investing in going green aren’t getting the recognition they deserve.”
She added: “We’re seeking views on our draft guidance, which clearly sets out what we propose businesses should do, to reduce the risk of misleading their customers. People must be able to trust the claims they see and businesses must be able to back them up.
The CMA stated that it was particularly keen to hear from anyone who buys or sells products that claim to be eco-friendly, including whether any further information is needed to help companies comply with the law.
The consultation will run until 16 July, with the aim of publishing the final guidance by the end of September 2021.
Commenting on the move, Michael Briggs, Head of Sustainability at consumer watchdog Which?, said: “It is good to see the CMA focusing on tackling misleading environmental claims by publishing this draft guidance. We know that consumers want to make more sustainable choices but risk being misled by some brands and manufacturers using environmental claims to market products and services that fail to live up to their ‘green’ credentials.
“Businesses should take heed of this guidance from the regulator and put a stop to greenwashing so that people can trust the information they see and make informed decisions. Otherwise, the regulator must be prepared to take enforcement action to tackle this issue.”
NAM Implications:
- It’s all about credibility and trust, folks…
- Think of the difficulty in persuading our audience to sample our proposition vs the ‘cost’ of retrieving a potential follower alienated by perceived deception.
- With the tell-a-friend mechanism to amplify the impact…
- i.e. worth remembering that nowadays ‘broadcasters’ rather than ‘powerless’ consumers are buying our brands…
