SAIF Golden Charter

Greenwashing: CMA puts businesses on notice

‘Eco-friendly’, ‘green’, ‘sustainably made’, and ‘conscious’ claims will now be more closely scrutinised with the introduction of the Competition and Markets Authority’s (CMA) Green Claims Code.

The ‘Green Code’ has six guidelines – principles to help businesses when advertising their green credentials:

• Be truthful and accurate
• Be clear and unambiguous
• Do not omit or hide important relevant information
• Comparisons must be fair and meaningful
• Claims must consider the full life cycle of the product or service
• Claims must be substantiated

Consumers are guided by claims, and many rely on guidance from the suppliers of the goods. Their accuracy is critical when making choices and ‘green’ claims are no different. The announcement by the CMA recognises this, and those who do not comply risk reputational damage and potential action.

What is likely to happen after an initial bedding-in period? The reputational risks here are very real. The CMA will carry out a full review of misleading “green” claims. The ethical consumer in the UK is reported to be worth £121bn a year – a rise of 24% from 2019 to 2020. The options are across all sectors, from ethical investments to ‘green power’ options, organic and ethical food choices and ‘green services’ which includes funeral choices.

Funeral choices already exist. Many choices in the market are labelled ‘green’ or ‘eco’ which may well be considered misleading, because the suppliers or manufacturers don’t have the proof to substantiate the claims. Beware it won’t just be the words, as it will in all probability include how the product is represented. If companies put emblems such as leaves and trees next to a product, it will have to be representative and be supported with accurate data.

Launching a ‘green’ range of coffins?

By my interpretation of the rules, companies will need to reference reasons why the range is greener than others you offer, or those of your competitors.

The Advertising Standards Authority (ASA) has announced it will be issuing its own guidance covering net-carbon claims, waste claims, recyclable claims, and biodegradable claims across all sectors. ‘Greenwashing’ is a term used to describe vague and inaccurate claims. It undermines those making genuine advances to help meet the targets the UK Government agreed to at the United Nations COP 26 Conference. The CMA’s interest and firm notice on these issues is welcomed by those who have genuinely innovated and made investment in being more environmentally efficient. Consumers stand to gain since claims will be based on reality.

About the author

Julian Atkinson is Managing Director of JC Atkinson, an award-winning, eco-friendly company, which is Fairtrade, FFMA, Forest Stewardship Council® Certified and a Carbon Trust Standard bearer.