New CMA Greenwashing Guidance – Tailored to Fashion

Building on the Competition and Markets Authority (CMA)'s Green Claims Code, and its recent consumer protection investigation, which culminated in ASOS, Boohoo and Asda agreeing to change how they promote their green credentials (see our blog post here), the CMA has published new guidance for fashion businesses to avoid "greenwashing".

The guidance – published on 18 September 2024 – provides practical tips and worked examples to help businesses navigate consumer protection laws when making green claims. On the same day, the CMA sent warning letters to 17 "well-known fashion brands", advising them to review their business practices and reminding them of the enhanced consumer protection powers the CMA will get once the relevant provisions of the DMCC Act come into force, currently expected to be in April 2025 (see our blog post here).

Below we set out some key points to be aware of, as well as recent Advertising Standards Authority (ASA) developments in relation to green claims.

Who is the CMA's guidance for?

The guidance is relevant for all businesses making environmental claims about clothing, footwear, fashion accessories and related services, such as packaging, delivery and returns. The guidance is of particular relevance to retailers, manufacturers, suppliers, wholesalers and distributors.

Key points when making green claims

The guidance reiterates and expands on the six main principles set out in the Green Claims Code, with a particular focus on unclear terms which may mislead consumers. By way of example, the CMA considers that broad terms such as "green" or "sustainable" are likely to be unclear and misleading to consumers. The guidance re-iterates that logos, icons or other imagery can also give a misleading impression of a product's environmental impact. 

In terms of other specific points for fashion companies to note:

• Fabric description

The CMA advises against using subjective or ambiguous descriptions such as "responsible cotton", instead favouring the use of objective and verifiable descriptions such as "50% recycled content".

Where environmental claims are based on the product's fabric composition, these should identify the specific percentage of relevant fibres and the minimum percentage of relevant fibres that the product must have in practice.

• Affiliations and accreditations  

When referring to affiliations or accreditation schemes, businesses are advised to provide a summary of their associated environmental benefits, with details of any "material connection" the business has to the third party or scheme. Sign-posting to further details should be included, with a prominent link to the relevant website.

• Ensuring accuracy of environmental claims

The guidance emphasises that all environmental claims should be supported by robust, credible and up-to-date evidence. This extends to evidence originating from suppliers. Businesses should actively review their internal processes to ensure all environmental claims are accurate: this includes developing policies, regular staff training, and implementing systems to verify that product listings are correct and meet advertised standards. It is also good practice to carry out regular spot checks of suppliers' certificates and to obtain express confirmation as to their compliance with policies.

Practical and visual examples

A number of visual examples are included to bring the guidance to life. Among these are a social media post describing a jacket as "planet-loving", with symbols depicting a leaf and a globe. The guidance explains that without further explanation (e.g. about the recyclability of the product), consumers may be given a misleading impression of the product's environmental credentials.  

Another example shows an ad describing an "organic cotton cardigan", with a less visible qualification that the composition is only 50% organic cotton. Here, the title may mislead consumers into believing that the entire product is made of organic cotton. To avoid this, the guidance advises the use of product titles that accurately reflect a product's fabric characteristics (e.g. "Bright blue cotton cardigan with 50% organic cotton").

Other examples relate to use of the terms "eco-friendly", "environmentally conscious", and claims about water usage and waste.

A warning shot to 17 businesses

On the same day the guidance was published, the CMA announced that it had sent letters to 17 "well-known fashion brands" advising them to review their business practices, and to emphasise the upcoming changes to the CMA's consumer protection enforcement powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA). Under the DMCCA, the CMA will obtain the ability to fine businesses up to 10% of their worldwide turnover for breaking consumer protection laws. This also follows an open letter published by the CMA to the wider sector in the spring.

In the CMA's press release, Hayley Fletcher, an Interim Senior Director of Consumer Protection issued a reminder that "all fashion companies – from designer labels to budget-friendly brands or independent boutiques – must be transparent and honest with their customers or risk enforcement action.”

The CMA said it had not initiated enforcement action against the 17 companies “in this instance” and will not be naming them publicly at this time.

Recent guidance and rulings from the UK's advertising regulator

Rules on environmental claims are also included in the Committee of Advertising Practice (CAP) and Code of Broadcast Advertising (BCAP) Codes which govern non-broadcast and broadcast advertising in the UK. In addition to the new guidance, the CAP has helpfully compiled its key advice and resources on green claims in advertising (available here).

These rules, which sit alongside the accompanying guidance from the CAP and the CMA, are enforced by the ASA. By way of example, in 2023, the ASA found that an ad for Charles Tyrwhitt featuring an image of a print cotton shirt and the text "We're proud to be a Carbon Neutral business" was misleading as it failed to make the basis of the claim clear. The ASA noted that the CAP Code requires that the basis of environmental claims be made clear and that unqualified claims could mislead if material information is omitted. CAP guidance provides that advertisers should avoid using unqualified carbon neutral claims and should not omit information explaining the basis for those claims which helps consumers’ understanding. Although the ASA acknowledged that Charles Tyrwhitt had based its claim on a report by a sustainability consultancy (which Charles Tyrwhitt said demonstrated its carbon neutrality), it had not provided any qualifying information within the ad to back up the claim. The ASA concluded that in the absence of this qualifying information, the ad was misleading.

For more information on making environmental claims in advertising, please see our blog post here.