The Competition and Markets Authority (CMA) has recently issued a consultation on its draft guidance for businesses that market their products and services as being 'green' or 'eco-friendly' (Guidance).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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.

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