According to an EU study in 2014, more than half of UK consumers take environmental considerations into account when buying products, meaning that they are heavily influenced by environmental claims.
Environmental claims suggest that a product, service, brand or business is better for the environment. They include claims that suggest or create the impression that a product or a service has a positive environmental impact or no impact on the environment; is less damaging to the environment than a previous version of the same good or service; or is less damaging to the environment than competing goods or services.
Misleading environmental claims occur where a business makes claims about its products, services, brands or its operations as a whole, or omits or hides information, to give the impression they are less harmful or more beneficial to the environment than they really are. Terms like ‘green’, ‘sustainable’ or ‘eco-friendly,’ especially if used without explanation, are likely to be seen as suggesting that a product, process, brand or business as a whole has a positive environmental impact, or at least no adverse impact. Unless a business can prove that, it risks breaking the law and advertising regulations.
Last year, the CMA announced that it was investigating the impact of green marketing on consumers. As part of this, the CMA recently led on an analysis of websites – alongside other global regulatory authorities – 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The CMA is now seeking views on draft guidance for businesses about ‘green’ claims to complement the guidance from the ASA and CAP. It explains the best way for businesses to communicate their green credentials, while reducing the risk of misleading customers. In particular, the proposed guidance sets out six principles that environmental claims should follow.
Environmental claims must:
- be truthful and accurate: Businesses must live up to the claims they make about their products, services, brands and activities;
- 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;
- not omit or hide important information: Claims must not prevent someone from making an informed choice because of the information they leave out;
- only make fair and meaningful comparisons: Any products compared should meet the same needs or be intended for the same purpose;
- 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;
- be substantiated: Businesses should be able to back up their claims with robust, credible and up to date evidence.
The consultation ends on 16 July 2021. The CMA aims to publish its final guidance by the end of September 2021.
“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”. - Andrea Coscelli, Chief Executive of the CMA