UK:
CMA Consultation – All On Green
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The Competition and Markets Authority (CMA) has
recently issued a consultation on its draft guidance for businesses
that market their products and services as being ‘green’ or
‘eco-friendly’ (Guidance). The Guidance
will mean that such companies will have to undergo greater scrutiny
when making claims about the ‘green’ credentials of its
products and services.
The Guidance comes on the back of a CMA investigation into
online marketing practices and the impact on consumers which found
that 40% of green claims made online could be misleading. Rather
than take enforcement action at this stage, the CMA has first
sought to issue clear guidance, following the consultation process,
on marketing the environmental impacts and claims of its goods and
services in a manner that also ensures that businesses understand
and comply with their existing obligations under consumer
protection law. This in turn will benefit consumers who rely on the
claims made via advertisements, product labelling, packaging and
even the product name when making purchases to ensure they are
receiving a product or service that meets these claims.
The Guidance sets out six key principles that any claims for
products and services purporting to be ‘green’ or otherwise
environmentally friendly should follow. These are that the claims
must be:
- Truthful and accurate. Therefore, any claims
must not mislead consumers or given them an inaccurate impression.
The Guidance give the example of, a business must not claim a
product is recyclable if it is not or certain parts of it prevent
it from being recycled. - Clear and unambiguous. Any claims made by a
business must be transparent and straightforward for a consumer to
understand, so any technical or scientific language that a consumer
will not understand should normally be avoided. - Must not omit or hide important information.
This means that any claims must not hide information that a
consumer would need to be provided with in order to make an
informed choice regarding a purchase. - Must only make fair and meaningful
comparisons. Any comparison included must be based on
clear and objective information to enable the consumer to make an
informed choice regarding a purchase and any products compared
should also meet the same needs as the product being
advertised. - Must consider the full lifecycle of the
product. Businesses must focus on the wider impact of the
product when determining the accuracy of claims and not just a
singular aspect which could result in misleading claims. For
instance, consideration of the supply chain of the product
including its component parts or where it was manufactured. - Must be substantiated. This means that a
business must be able to evidence support of any claims with
‘robust, credible and up to date evidence’.
The CMA is inviting feedback on its Guidance, including whether
any further information is needed to help companies comply with the
law. The consultation process will run until 16 July 2021, with the
aim of publishing the final version of the Guidance by the end of
September 2021, which businesses who seek to promote their products
and services by highlighting its environmental credentials should
pay close attention to as any future failure to comply could suffer
enforcement action from the CMA.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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