Environmental and sustainability claims are on the increase in sectors including agriculture, food and drink, and fashion. On 2 November, the Competition and Markets Authority (CMA) announced that it is undertaking work to better understand how consumer protection legislation can be used to tackle false or misleading environmental claims that affect consumers.
It is anticipated that this work will compliment and inform the CMA's Annual Plan commitment to support the move towards a low carbon economy.
The CMA has advised that it is focusing on:
- how claims about the environmental impact of products and services are made;
- whether such claims are supported by evidence;
- whether such claims influence peoples’ behaviour when purchasing such goods and services; and
- whether consumers are misled by an absence of information about the environmental impact of products and services.
The ultimate intention is that guidance will be produced on how businesses can best be transparent in the way that they market goods and services in relation to any claims made about environmental impact. Advice will also be provided government based on the information gathered by the CMA to inform the public debate on these issues.
The CMA has made a call for information and has launched three questionnaires, one for customers, one for businesses and one for stakeholders. The CMA wants to understand what factors influence purchasing decisions by customers and how businesses ensure that eco-friendly claims comply with the law. It is also making a general call to stakeholders to provide for relevant research or information in this area. The call for information opened on 2 November and will remain open until 14 December 2020. Guidance is anticipated in summer 2021.
In addition to the call for information, the CMA are working with the Authority for Consumer and Markets (ACM) in the Netherlands co-leading a project with the support of the International Consumer Protection Enforcement Network (ICPEN). The intention is to publish high-level guidance for businesses with a view to setting consistent global expectations on the candour of environmental claims.
The process is at a very early stage and so the CMA has not established whether consumer protection law may have been broken. However, if evidence comes to light that some businesses are making misleading claims about how environmentally friendly their products or services are, the CMA may take enforcement action.
If you have any questions about this call for information, or would like advice on compliance with the impact of consumer protection law on this area, please contact us, or your usual Brodies contact.
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