Avoiding greenwash: How can UK businesses avoid falling foul of the Green Claims Code?
The Competition and Markets Authority’s (CMA) director of consumer protection speaks exclusively to edie with her advice on avoiding greenwashing, as defined by the CMA’s Green Claims Code, without resorting to ‘greenhushing’.
The Green Claims Code was first published in 2021 and was designed for businesses with consumer-facing products and services to check whether their environmental claims would be misleading as defined by British consumer law. It covers issues including inaccurate claims, overstated claims and claims that don’t enable ‘fair and meaningful’ comparisons.
The Code has been in the headlines this week, more than a year after launch, with the Authority confirming plans to broadly investigate the environmental claims made by fast-moving consumer goods (FMCG) brands selling their products in the UK, including food, drink, toiletries and cleaning products.
FMCG was selected as the second sector of focus for the CMA, following the launch of a broad fashion investigation and, subsequently, a more in-depth investigation into fast fashion brands Asos, Boohoo and George at Asda last year.
The Authority stated that it is important to address greenwashing by FMCG brands as most members of the public spend a significant amount of money on these products and purchase from these categories frequently. Moreover, environmental claims are becoming extremely prevalent on FMCG packaging, with the CMA’s initial work finding claims on 91% of dishwashing products and virtually all toilet products.
Off the back of this week’s announcement, the CMA’s director of consumer protection Cecilia Parker-Aranha speaks exclusively with edie to answer some frequently asked questions about the code.
What, exactly, is in the Green Claims Code?
The Green Claims Code is a list of six key principles designed to prevent businesses from making misleading environmental claims about their products and services. These state that claims must:
- Be truthful and accurate
- Be clear and unambiguous
- Not omit or hide important/relevant information
- Be fair and meaningful, if they include comparisons
- Consider the full life-cycle
- Be substantiated
The code applies in the UK only. The Government has produced additional resources including a video, claims checker and quiz, which can be accessed here.
If you are found to break the Code, what happens next?
Parker-Aranha explains that, for the CMA to investigate a particular business’s claims to assess compliance with the Code, it will first need to issue a letter of consultation. It has only done this for three businesses so far – Asos, Boohoo and George at Asda. Once the business responds, the CMA announces the investigation publicly.
As the investigation concludes, the CMA has the power to order the business to make recommended changes to its messaging on a voluntary basis. Should the business fail to do so, the CMA can begin litigation. There is the ultimate risk of ending up in court and, by extension, fines and reputational damages. The CMA will announce any litigation action publicly.
“The idea is that you do a small number of enforcement cases but you actually drive compliance across the sector,” Parker-Aranha says.
“We’ve seen this in other sectors in the past; we’ve taken action against the biggest, the sector leader, and then used that to drive change with smaller businesses. It has been quite successful of making sure there’s a level playing field.”
Businesses not being investigated by the CMA will not have litigation started against them by the Authority. However, other organisations or individuals may look to hold them accountable through other channels.
There have been several instances whereby brands have had advertisements banned in the UK by the Advertising Standards Agency (ASA) over the past year, for example. The ASA has banned a campaign from HSBC which it believes to omit important information on fossil fuel finance; a TV advert from Innocent Drinks which led some shoppers to believe the business already had a net-positive environmental impact and a Persil advert vaguely claiming that the detergent was ‘kinder to the planet’.
Where do businesses usually fall foul of the Code?
From the ongoing investigation in the fashion sector, Parker-Arhana identifies “some common themes” in the kinds of claims which raise cause for concern.
She says: “One is using very vague language that consumers aren’t necessarily going to fully understand.
“The other challenge, I think, for businesses, is that they can focus on a very narrow part of what they’re doing – a part of the supply chain or a [proportion] of the materials they are using – and make a claim that leads to the consumer thinking that the whole product is not damaging to the environment.
“We’ve also seen businesses that are maybe being a bit too enthusiastic in what they are promoting. They’re not deliberately trying to do the wrong thing, but they are perhaps pushing a particular message that gives the overall impression that everything they’re doing is great, when, actually, it makes up quite a small part of their business. They’re not telling the full story about the product.”
So, in summary, the most common issues are vague claims, overstated claims and language which is not clear to consumers.
How can you avoid these pitfalls?
Parker-Arhana admits that being specific enough without veering into jargon territory or providing information beyond the level all consumers want to see “is a tricky line for businesses to walk”.
She recommends avoiding technical terms and instead being specific about what the claim relates to. For example, instead of calling a bottle “eco” or “circular”, you may want to highlight its use of recycled materials.
If you claim that your plastic bottle is 100% recycled when this relates just to the main piece of the packaging, and not the smaller components, this would fall foul of the Code. You could instead say “100% recycled, excluding wrapper and cap”. If the bottle contains a proportion of recycled plastic, you could claim “includes recycled plastic”, but simply “recycled” may be too vague and give the impression it was 100% recycled.
Regarding the impression that claims give, Parker-Arhana recommends always getting a second opinion. She says: “Testing with your customers to see what they understand… is really crucial. Obviously, bigger businesses have an easier time in doing that. But even a quick sense check to see what people would take away from a certain claim, how they would understand it, is important.”
The most important thing to do, in any case, is to ensure that you have evidence to back up any claim. Parker-Arhana stated that, during work to date, the CMA has seen the same claim made in two cases, but only one case being greenwashing. This is because the first business had up-to-date, good-quality data to support its claim while the second did not.
Is ‘greenhushing’ the answer to compliance with the Code?
To avoid greenwashing accusations, some brands and businesses may feel compelled not to communicate as much about their environmental plans, instead sitting quietly on the information they have – or don’t have. This practice is known as ‘greenhushing’. There were reports that, after the CMA launched its work in fashion, some brands quietly scaled back their product labelling and filtering options relating to the environment. One piece of research conducted post-Code-launch found that half of UK-based marketing workers feared greenwashing.
Parker-Arhana explains that the CMA is by no means promoting greenhushing in implementing the Code: “One of the reasons we produced [this] was to give businesses the confidence to tell their sustainability story. We certainly don’t want businesses not to talk about this, because that’s not good for consumers.
“If consumers are deciding where to shop and environmental sustainability is important to them, we don’t want them choosing the company that has greenwashed to the disadvantage of the one that is telling the truth.
“I want businesses to understand that we’re not just out to get them. We are trying to make sure that consumers get the information they need, and that businesses trying to do the right thing and really working on their own sustainability… have the confidence to tell their customers about it.”
Parker-Arhana concludes that brands should not feel the need to greenhush, so long as they have evidence to back up their claims and have confidence that consumers will understand their claims.
Are there any plans to revise the Code?
“The Code was designed to be high-level, principles-based, and, to some extent, future-proofed,” Parker-Arhana explains.
Revisions may be prompted by future changes to consumer law but is impossible to say if and when this will happen at this stage.
However, Parker-Arhana does highlight that the CMA wants to provide more information – including more specific and detailed information – to businesses. “One thing we’re really conscious of is that as we progress through these different investigations and reviews, we are learning more and more about what is necessary within particular sectors,” she says. “We will reflect on what we can make available to businesses that will help them. “
This should hopefully be beneficial to all but especially to smaller businesses that may not have the ability to hire consultants or add in-house specialists in this field.
Hear more from the CMA at edie 23
Taking place in London on 1-2 March 2023, edie’s biggest annual event has undergone a major revamp to become edie 23, with a new name, new venue, multiple new content streams and myriad innovative event features and networking opportunities.
edie 23 will take place at the state-of-the-art 133 Houndsditch conference venue in central London. Held over two floors, the event will offer up two full days of keynotes, panels, best-practice case studies and audience-led discussions across three themed stages – Strategy, Net-Zero and Action.
The CMA’s Cecilia Parker-Aranha will be speaking on Day 2 of edie23 ( March 2) during a fireside chat on ‘greenwash vs greenhush: Striking the right balance with your sustainability communications’. This session will be chaired by Natura & Co’s global director of advocacy Charmian Love.
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