28th January 2022
On 10 January, the Competition and Markets Authority (the CMA) announced that it has commenced a review of environmental claims, (known as greenwashing), in the fashion retail sector and that it plans to look at other sectors in due course.
The review will look at whether businesses are breaching consumer protection law by making claims that a product, service, process, brand or business is better for the environment, and follows publication by the CMA in September last year of guidance on making environmental claims on goods and services (see our alert on Greenwashing: Businesses urged to clean up their act in relation to green claims).
If the CMA identifies matters which require enforcement action, it can seek an enforcement order from a court against the business(es) involved. The CMA can also accept an undertaking from a business to stop breaches of consumer protection law. Enforcement orders and undertakings can also include ‘enhanced consumer measures’, which require businesses to take additional steps to protect consumers. Finally, the CMA can pursue criminal enforcement action in the most serious cases of alleged breach.
Given the public focus on environmental issues and the CMA’s review, businesses in both the fashion retail sector and others may consider that now is a good time to assess whether the claims they are making are compliant and the processes they follow before making such claims are robust. If the CMA investigates a particular business, a key question will be not just whether it is making misleading claims but also whether it has taken steps to develop a culture of compliance with consumer protection laws, for example via staff training, policies and procedures.
To help with an initial assessment, we have prepared the attached list of 10 questions for businesses to run through to enable them to self-assess their compliance.
If the answer to any of these questions is ‘no’, or you’d like to discuss any aspect of the CMA’s review, please get in touch with our team of experts.