Greenwashing – CMA publishes final compliance advice for green heating and insulation products

On 16 July 2024, the CMA published its final compliance advice on the marketing of green heating and insulation products together with a suite of videos and checklists for businesses.

The publication of these materials follow the CMA's consultation on its draft compliance advice issued in December 2023, which we outlined in more detail in a previous blog post (see here). While the final advice has not changed materially from the draft, the CMA has made a number of additions and clarifications following the responses received to its consultation. Below we set out the key points to be aware of in the final materials.

Scope

While the overall scope of the advice has not changed, the CMA has clarified that the principles set out in the advice apply across all marketing channels (e.g. telemarketing, online, advertorials, digital ads, and in-person marketing), and at all touchpoints throughout the customer journey when making statements about a product.  In this vein, the advice makes clear that businesses are also responsible for third-party materials used in their own marketing.

Although not the immediate audience for the advice, the CMA also encourages businesses marketing other (non-green) home heating products and solar PV panels to consider the same general principles when assessing their compliance with consumer law.

Headline pricing

While the CMA's "Headline Pricing Principles" are broadly as in the draft advice, there are a few key additions to note, including expanded guidance for businesses. The CMA outlines six Principles in relation to headline pricing:

• 'Accurate' – Further guidance covers circumstances where there are genuine reasons why part of the total price cannot be calculated in advance. The CMA advises that in these cases, businesses:
  • can give an indicative headline price (e.g. if certain costs will differ depending on the size or type of property, the headline price should be based on a typical size or type likely to be most relevant to the target audience), provided this is not misleading; and
  • must clearly and prominently explain how the indicative headline price has been calculated and how the cost would be calculated in other cases.
• 'Comprehensive' – The advice provides new practical examples around how to inform consumers about unavoidable costs, such as clearly setting these out alongside the headline price, and making sure any regular ongoing payment requirements are fully transparent.
• 'Honest' – The advice sets out additional examples of misleading techniques, such as artificially inflating the standard or usual headline price to give the impression that any stated reduction is a special offer, discount or deal.  
• 'Clear' – Greater emphasis is given to the importance of presenting important qualifications clearly and prominently in marketing communications.
• 'Careful in how you refer to access to government funding' – The CMA warns that, while including the value of government funding (e.g. a grant) in a headline price is not in itself problematic, this would likely be misleading if most consumers are unlikely to qualify for the funding.
• 'Open about bundling of products' – The advice offers suggestions such as setting out individual prices of each item within a bundle alongside the bundle price, as well as highlighting overall savings compared with the cost of buying all the components of the bundle separately.

Making product claims

The core message remains that "if you can't back it up, don't say it", with a focus on ensuring the accuracy of any claims and having documentary evidence to substantiate them. The advice further makes clear that if a business uses its own data to support the claims it makes, that data should be representative and extensive enough for any conclusions to be credible and robust.

Illustrative examples

In response to consultees' calls for further clarity, the CMA has expanded on the examples around headline pricing and product claims, with more detail on when a practice could be misleading. For instance:

• On "headline pricing", the CMA gives an example advert which implies that buying solar PV panels and batteries as a bundle will be beneficial (a "hot offer"). In this case, the advice notes that the consumer will not be able to weigh up the overall offer and make an informed decision, unless individual prices are also set out.
• On "making product claims", the example advert tells consumers they would "cut bills by £1,700 each year" by choosing the supplier. Here the CMA explains that this may be misleading unless a significant proportion of consumers could achieve this saving, even if such a saving would be possible for some.

Making the advice more accessible

The CMA has also published a number of supplementary resources with the stated aim of making the advice as accessible as possible for businesses (noting that most suppliers in the sector are small and medium size enterprises). These resources include videos and checklists on "Making Product Claims" and "Presenting Pricing Information".

Next steps?

The CMA has confirmed that it will keep the advice under periodic review as the sector and associated case law develops, and provides assurances that it has worked with the Advertising Standards Authority in developing the final advice to avoid inconsistencies in guidance.