As the UK looks to transition to a low carbon economy and consumers become more environmentally conscious in the marketplace, there is a growing incentive for businesses to accentuate the purported green credentials of their products. With a recent study showing that 40% of websites deploy potentially misleading environmental marketing tactics, regulators are more concerned than ever to ensure the accuracy and fairness of environmental or "green" claims made in advertising so that consumers can make properly informed choices.

In November last year, the Competition and Markets Authority ("CMA") launched an investigation and consultation into how consumer protection legislation can be better harnessed to prevent false or misleading green claims. Following consultation, the CMA has now published new guidance.

This blog summarises the new guidance and considers how it fits in to the existing regulatory landscape for green claims made in advertising in the UK.

The regulatory landscape

A green claim is a claim which suggests a product, service, brand or business is either good for the environment or less environmentally damaging than competing goods or services. Green claims are regulated by the parallel and overlapping regimes of the CMA and Advertising Standards Authority ("ASA").

The CMA is the agency responsible for enforcement of UK consumer protection legislation such as the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Rights Act 2015.

The ASA regulates advertising in the UK through the non-binding Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing (the "CAP Code") and Code of Broadcast Advertising (the "BCAP Code") (together, the "Codes").

Our overview of the CMA and ASA regimes as they relate to green claims can be found here, and our top tips for green claims compliance can be found here.

In addition to those regimes, businesses may have to comply with discrete sector or product-specific requirements which relate to a particular good or service, such as, for example, energy labelling requirements for certain household appliances.

CMA guidance

The CMA's new guidance is intended to help businesses better understand and comply with existing consumer protection legislation as it relates to green claims.

With that goal in mind, the guidelines set out six guiding principles:

  • Principle (a): Claims must be truthful and accurate
  • False claims are, of course, prohibited but even factually correct claims must not give an inaccurate overall impression. Absolute claims are more likely to be inaccurate and misleading, and claims must not suggest environmental characteristics which are, in fact, standard features.

  • Principle (b): Claims must be clear and unambiguous
  • Claims should be worded in a transparent, easy-to-understand manner which is not liable to confuse consumers.

  • Principle (c): Claims must not omit or hide important relevant information
  • Claims should not cherry-pick information by focusing on one feature of a product or service and leaving out other relevant features. This overlaps with the principle (e) below.

  • Principle (d): Comparisons must be fair and meaningful
  • This is linked to principle (a) and requires that comparisons with other products or services are based on clear and objective criteria.

  • Principle (e): Claims must consider the full life cycle of the product
  • The overall environmental impact of the product or service across its full life cycle should be considered, including the supply chain and disposal.

  • Principle (f): Claims must be substantiated
  • Businesses should have scientific or other factual evidence to support their claims and prove they are true. Broad and absolute claims require clearer evidence to back them up.

The guidance goes on to give further detail and points for consideration around each principle, as well as illustrative examples and case studies of how each may arise in practice.

Relationship with the ASA Codes

The ASA were one of the parties consulted in the drafting of the CMA guidance and this is reflected in the six guiding principles which are explicitly intended to compliment and be consistent with the Codes.

For example, the Codes' general rules on substantiation, which require advertisers to provide documentary evidence to back up their claims, are mirrored in principle (f). In addition, the general obligation not to omit material information also aligns directly with principle (c).

Similarly, the Codes' specific rules on environmental claims have also clearly informed the draft guidelines in several respects:

  • Consideration of the full life cycle of the advertised product is important, and claims based on only one party of that lifecycle should not mislead consumers as to its overall environmental impact
  • Absolute claims require a higher degree of substantiation
  • It is misleading to highlight the environmental impact of features that are, in fact, industry standard

The guidelines do not seek to add new substantive rules but rather further flesh out principles which were already articulated in the Codes and underlying consumer protection law. The illustrative examples and case studies are particularly helpful for businesses and are a useful compliance reference guide for green claims in advertising.

How can we help?

As sustainable, environmentally friendly products and services become more important to consumers, marketing around green claims will become more closely regulated by the CMA and ASA. If you require advice on your marketing materials and advertising and compliance with CMA guidance and the Codes, please get in touch with Martin Sloan or Grant Strachan.

A version of this article appeared in The Scotsman.