Competition watchdog gives companies deadline to end greenwashing | Competition and Markets Authority

Britain’s competition watchdog has given companies making misleading claims about their environmental credentials until the end of the year to stop the practice known as greenwashing.

According to the Competition and Markets Authority, too many companies have been wrongly credited with being green to win over environmentally conscious consumers.

Highlighting the upcoming Cop26 climate conference hosted by the UK in Glasgow, the CMA urged companies to abide by the new guidelines published Wednesday to support global efforts to reduce carbon emissions.

From 2022, the regulator will launch a review of misleading green claims, with sectors such as fashion, transportation, the beauty industry and food and drink likely to receive particular attention.

The CMA began investigating green claims last year, find that up to 40% can be misleading to consumers.

Also in 2020, the Advertising Standards Authority targeted several large companies, including airline Ryanair, carmaker BMW and oil producer Shell, over greenwashing ads.

The CMA’s work will focus on whether companies’ claims violate consumer law, with the regulator saying any violation could lead to sanctions even before the review begins.

Her work will be supported by the new guidelines some have dubbed the Green Claim Code, which highlights six principles of conduct companies must follow when making claims about the environmental impact of their products.

One of the guiding principles of CMAs is that companies should not omit or hide important information and should consider the full life cycle of the product.

Greg Hands, the Minister for Energy and Climate Change, said: Millions of UK households are rightly choosing to switch to green products to reduce their carbon footprint. But it is the only right that this commitment is backed by transparent claims from companies.

The new Code of Competition Regulators will contribute to this with advice on how best to communicate and understand environmental claims.

The government is also reviewing green energy tariffs to ensure consumers can trust that they are choosing companies that make a conscious choice to invest in renewable energy.

Andrea Coscelli, the CEO of the CMA, said exaggerating green credentials could be an outright violation of consumer law, leading to sanctions.

More people than ever are considering a product’s environmental impact before parting with their hard-earned cash, he said. Were concerned that too many companies are wrongly taking credit for being green when truly eco-friendly companies are not getting the recognition they deserve.

Any company that does not comply with the law risks damaging its reputation with customers and could face action from the CMA.

Violations of the relevant consumer protection legislation are subject to a maximum prison sentence of two years.