In March 2024, the UK Competition and Markets Authority (“CMA”) announced three popular fashion retailers signed voluntary undertakings to ensure consumers have a clearer idea of how green their products really are. It was fashion giants Asos, Boohoo and George at Asda who committed to only making green claims about their products that are ‘accurate, clear and not misleading’.

Compliance Guide for fashion brands

Following CMA’s investigation into the 3 fashion giants, CMA published a compliance guide (“Guide”) on 18 September 2024 which intends to provide fashion brands with practical guidance on how they can ensure they comply with consumer law so that consumers are not misled by statements about a company or product’s climate and environmental credentials.

The guidance has been developed to promote CMA’s efforts in tackling ‘greenwashing’ and to explain how fashion retail businesses can follow the Green Claims Code when making environmental claims.

What is a “green claim”?

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

For example, a statement about clothing being “recycled” or a product labelled as being produced “sustainably” would normally be considered green claims. Many businesses use green claims to help market their products or services. They do this through a range of methods such as statements, symbols, graphics, colours, and product brand names.

The Key Principles of the Compliance Guide

The Guide provides practical guidance for fashion brands and is applicable to all businesses that make environmental claims about clothing, footwear, fashion accessories and related services i.e., packaging, delivery and returns.

Each business in the supply chain has a responsibility to ensure its claims are substantiated and accurate. The guidance document is relevant to retailers selling their own or third-party products via marketplaces. It is also relevant for manufacturers, suppliers, wholesalers, and distributors.

There are two key takeaways from the guidance, namely: -

1. Ensure your environmental claims are clear and accurate. The Guide highlights the need for environmental claims to be ‘clear and accurate’ and further specifies businesses must (i) not hide important information, (ii) avoid using unclear terms such as ‘green’, ‘sustainable’ or ‘eco-friendly’ (iii) not mislead imagery and icons in a misleading way and (iv) ensure comparisons, product ranges, fabric descriptions, and affiliation and accreditations are clear and not misleading. The Guide also highlights that your business should ensure environmental targets are presented clearly and that consumers can understand the terms you use to explain claims.  As well as considering these issues separately, businesses must have regard to the overall impact of their environmental claims, as different misleading claims taken together can have a greater impact on their customers’ decisions.
2. Ensure you have adequate processes in place to make sure environmental claims are correct. The Guide emphasises that you should have internal processes in place to make sure all environmental claims are accurate and do not mislead customers. For example, having regular training for staff and implementing systems to correct mistakes when listing products for sale. In particular, the Guide notes the need to ensure suppliers are able to evidence environmental credentials and to check any claims third parties make about their products.

Consequences of non-compliance

Your business must comply with consumer protection law when making environmental or green claims. If you do not comply, then you may face enforcement action which could result in you being ordered to change your practices, and you may have to pay money back to your customers. Once the Digital Markets, Competition and Consumers Act 2024 comes into force in 2025, your business could be fined up to 10% of its worldwide turnover if you breach consumer law.  

We anticipate there will continue to be enforcement action in this space. It is therefore imperative that you obtain legal advice if you are unsure whether your business’s environmental claims are correct. If you do require any assistance with this, then please do not hesitate to get in contact with us.