Greenwashing and Consumer Protection: What businesses need to know

The European Consumer Organisation and 12 of its member organisations have just filed a complaint with the European Commission and European consumer protection authorities against several energy companies regarding alleged misleading environmental claims in the marketing of energy products. Last year Which? published data finding than 6 in 10 products failed checks in relation to multiple principles of the Competition and Market Authority (CMA)’s Green Claims Code. And, recently, 21 airlines agreed to change their practices on environmental claims to ensure that they aren’t misleading

Green claims remain a key enforcement priority for the Competition and Markets Authority (CMA), and therefore for businesses across all sectors. Recent changes to UK consumer protection law [1] have significantly increased the risks associated with misleading environmental statements, so it’s more important than ever to understand, and know how to mitigate, risks around greenwashing.

Greenwashing and consumer protection: What do businesses need to know?

When the CMA first investigated online environmental claims in 2020, it found that around 40% of green claims reviewed could be misleading. That review led to the publication of the Green Claims Code, which remains the CMA’s principal guidance for businesses making environmental claims.

The Green Claims Code is guidance rather than legislation. However, it reflects and explains legally binding consumer protection requirements. Since April 2025, those requirements have been contained primarily within the Digital Markets, Competition and Consumers Act 2024 (DMCCA), which replaced and updated the previous consumer protection regime in this area.

The CMA now has direct consumer enforcement powers. The CMA can now investigate suspected consumer law breaches, determine infringements itself, require remedial action and impose substantial financial penalties without court proceedings.

The potential consequences of misleading environmental claims now (non-exhaustively) include:

• CMA investigations and enforcement action
• Significant financial penalties, including fines linked to global turnover
• Requirements to amend or withdraw marketing materials
• Consumer redress obligations
• Advertising Standards Authority (ASA) investigations and rulings
• Trading Standards intervention
• Reputational damage
• Consumer, shareholder or competitor complaints and litigation.

The CMA has also undertaken sector-specific work, including investigations into environmental claims made by fashion retailers, reviews of claims in the fast-moving consumer goods sector and the publication of further guidance clarifying responsibility for green claims across supply chains.

Businesses should, therefore, anticipate that environmental claims made in advertising, packaging, websites, social media content, investor communications and product labelling may be scrutinised by regulators and consumers alike.

The CMA’s six principles remain central

The Green Claims Code continues to set out six key principles.

1. Claims must be truthful and accurate. Environmental claims must reflect reality and mustn’t exaggerate environmental benefits. Broad statements such as “green”, “environmentally friendly” or “sustainable” are particularly high risk if unsupported or unexplained.
2. Claims must be clear and unambiguous. Consumers should be able to understand exactly what a claim means without needing specialist knowledge. Ambiguous wording, technical jargon or vague environmental messaging should be avoided.
3. Claims mustn’t omit or hide important information. Businesses must present material qualifications and limitations clearly and prominently. Important information shouldn’t be hidden in footnotes or only accessible via links, QR codes or separate webpages.
4. Comparisons must be fair and meaningful. Comparative claims must compare like with like, explain the basis of comparison and be capable of substantiation.
5. Claims must consider the full lifecycle. Environmental benefits shouldn’t be presented in a way that gives a misleading overall impression. Focusing on one positive feature while ignoring material environmental impacts elsewhere in the product lifecycle can amount to greenwashing.
6. Claims must be substantiated. Businesses should hold robust, current and credible evidence before making environmental claims.

Practical advice

Alongside following the Green Claims Code, businesses should:

• Audit all environmental claims made across websites, packaging, social media, advertising, tenders, communications and all customer ‘touchpoints’.
• Gather and retain evidence supporting every environmental claim, including lifecycle assessments, certifications, testing data and supply chain information.
• Use precise language and avoid broad claims such as “eco-friendly”, “green” or “sustainable” unless they can be fully justified.
• Review visual messaging, including logos, imagery, icons, colours and certification marks. Greenwashing can arise through overall presentation and not just through wording.
• Implement formal approval processes for environmental marketing and sustainability-related communications.
• Regularly update substantiation records to ensure claims remain accurate as products, supply chains and business practices change.
• Train marketing, sales, legal, procurement and sustainability teams on green claims requirements and maintain records of that training.
• Review supplier arrangements, including contractual warranties, information-sharing obligations and audit rights relating to environmental claims.
• Maintain a clear audit trail demonstrating how claims were developed, verified, approved and monitored.
• Seek specialist advice early if concerns are raised by regulators, consumers, competitors or campaign groups.

How we can help

Walker Morris will continue monitor and report on key developments in this area. In the meantime, we can help your business with the drafting or updating of appropriate policies and procedures to guard against greenwashing; with the provision of consumer protection and/or specific greenwashing training; with a swift and strategic response to any greenwashing or other consumer protection investigation, complaint or allegation made against a business; or with wider commercial or dispute resolution advice in the context of the ESG agenda.

Please contact Nick McQueen for further advice or assistance.

[1] See Preparing for dual enforcement: How the Digital Markets, Competition, and Consumer Act is changing the consumer protection landscape – Walker Morris; and DMCCA consumer protection: What housebuilders need to know – Walker Morris