Businesses operating in Britain, beware: The United Kingdom competition watchdog can now fine firms accused of misleading consumers through vague and unsubstantiated green claims up to 10 percent of their global turnover.
The new powers came into force this week with the enactment of new consumer protection provisions under the 2024 Digital Markets, Competition and Consumers Act, which have imbued the Competition and Markets Authority with the ability to decide whether consumer protection laws have been breached rather than having to litigate the decision through the courts. Equally important, the body is now able to address any infringements “directly and proportionately,” including through consumer redress and financial penalties.
“Consumers deserve to know that the CMA has their back; and fair-dealing businesses looking to grow and invest deserve to know that their competitors are playing by the same rules,” chief executive Sarah Cardell said in a statement. “We will use the new regime to strengthen the trust and confidence of consumers and businesses—supporting economic growth and incentivising good corporate practice.”
The new regime doesn’t cover greenwashing alone, of course. Aggressive sales tactics, hidden fees, unfair and unbalanced contract terms, fake reviews, drip pricing and, indeed, false information, all fall under the purview of what the CMA describes as egregious commercial practices and subject to the same fines. But the overall move is one that organizations that have been fighting sustainability misrepresentations are celebrating. Among them is the Changing Markets Foundation, which has dubbed the development a game-changer in the fight against fake green news.
Related Stories
“It’s more than a slap on the wrist,” senior campaigns manager Urska Trunk told Sourcing Journal of the 10 percent figure, which she thinks has real teeth for a change. “I think it really sends a clear message to the companies now that they need to get their green claims right, or they can face penalties.”
Even so, the CMA’s leveling up is only “part of the puzzle,” Trunk said, adding that strong legislation is needed to level the playing field between “companies that are really sustainable and those that are just saying they are.” This includes regulation that shifts fashion production away from the use-and-dispose model to one where their purveyors are responsible for their end-of-life management because “that is true sustainability.”
Much also hinges on the CMA’s capacity to enforce its broader mandate, which doesn’t only include clothing and footwear but also everything from airline tickets to gym memberships to the price of infant formula, no matter the company’s size. At the same time, the group has made significant strides in the realm of fashion by securing formal commitments from Asos, Boohoo Group and George at Asda to use only “accurate and clear” sustainability claims last March following a nearly two-year probe over eco-friendly marketing messaging.
In September, the body published a “green claims in fashion” guide to help brands not fall afoul of the United Kingdom’s Green Claims Code when touting their products’ better-for-the-planet characteristics. The CMA also wrote to 17 unnamed but “well-known” brands advising them to review potential marketing pitfalls, such as deploying nebulous terms like “sustainable,” using “recycled” to describe the entirety of a product when only certain elements could be described and such, and grouping items into “eco” collections without specifying the criteria for their inclusion.
“I feel like it already started flexing its muscles in the run up to the legislation,” Trunk said of the CMA. “I feel like fashion will be one of the the focus areas given that it has already given so much attention to this in the past.”
She raised the example of Debenhams Group (née Boohoo), which had a 1.46 billion-pound ($1.9 billion) in 2024 and could potentially face a 146 million-pound ($189 million) fine if it used phrases like “more sustainable” to describe certain products. A Debenhams spokesperson said that the e-tailer has adjusted its marketing and is committed to working collaboratively with the CMA, particularly given that it was part of the 20-month process to develop the green claims code.
Britain aside, other countries have also been cracking down on greenwashing. Norway’s scrutiny of H&M Group and Norrøna’s employment of the Higg Materials Sustainability Index in 2022 is frequently cited as the ur-example, particularly since it nearly upended the credibility of the then-Sustainable Apparel Coalition’s suite of measurement tools. More recently, a German court found Adidas guilty of failing to define how it would achieve “climate neutrality” by 2050, despite what the sportswear giant said was a grounding of its net-zero targets in science. A spokesperson from Adidas said that while specific wording on its website has been adjusted, its plans and targets for reducing emissions remain unchanged.
Up north, Canada is tightening up its anti-greenwashing laws just as a newly released survey by the nonprofit Fashion Takes Action found that 79 percent of Canadians polled say that greenwashing is a problem in fashion and that 76 percent believe that the government should fine agencies and other communications companies for misrepresenting sustainability practices. So is the European Union, which will soon outlaw generic marketing claims such as “environmentally friendly,” “natural,” “biodegradable,” “eco” and, yes, “climate neutral.” In the United States, W.L. Gore and Associates, maker of Gore-Tex, was sued in February for “making empty environmental promises” while continuing to use products containing the hazardous “forever” chemicals known as PFAS. Gore denied the lawsuit’s allegations in a statement on its website, saying that it has been and remains committed to the “health and safety of our associates, our community and the environment.”
“I think it’s a really important year for companies in all the sectors to go back and revisit any green claims they’re making and make sure they are backed up by solid and up-to-date evidence,” Trunk said. “And it’s not just about avoiding the fines. It’s also just gaining consumer trust as well, because I do believe consumers are getting more and more educated in recognizing what is green and what is not green.”