Greenwashing
Greenwashing is the misstatement or overstatement of the positive environmental impact of goods, services or of a business, or the downplaying of any negative environmental impact.
There is an increasing demand from consumers and supply chains for eco-friendly products and net-zero businesses encouraging suppliers to make claims about their green credentials when selling their products and services.
Greenwashing’s close relative, bluewashing
The same applies to the overstatement of the positive social impact of businesses, products and services (sometimes referred to as bluewashing), whether that be for the benefit of workers, local communities, or marginalised groups. This is particularly relevant to procurement in the public sector, where businesses are required to showcase their sustainable practices and corporate social responsibility (CSR).
The Digital Markets, Competition and Consumers Act
The Digital Markets, Competition and Consumers Act, published on 3rd June 2024, will give the Competition and Markets Authority (CMA) new powers to take direct enforcement action against any businesses engaging in unfair commercial practices to consumers.
Unfair commercial practices include:
- Providing false or misleading information
- Omitting relevant information
- Falsely displaying a quality mark or endorsement
- Failing to comply with an advertised code of conduct
Under its new powers, the CMA will have the ability to award compensation to consumers and to fine businesses up to 10% of their turnover. Trading Standards and the Advertising Standards Authority may also be able to take action for misleading green claims.
The Green Claims Checklist
The CMA has published its Green Claims Checklist to help businesses understand their obligations when making green claims. The Green Claims Code checklist – GOV.UK (www.gov.uk)
These include:
• The claim must be accurate and clear for all to understand
• The claim won’t mislead customers or other suppliers
• There’s up-to-date, credible evidence to show that the green claim is true
• The claim clearly tells the whole story of a product or service; or relates to one part of the product or service without misleading people about the other parts or the overall impact on the environment
• The claim doesn’t exaggerate its positive environmental impact, or contain anything untrue – whether clearly stated or implied
• Durability or disposability information is clearly explained and labelled
• The claim doesn’t miss out or hide information about the environmental impact that people need to make informed choices
• Features or benefits that are necessary standard features or legal requirements of that product or service type, aren’t claimed as environmental benefits
The CMA can require a business to justify itself in relation to any claims it may make regarding its products and services. It is essential that before making any green or other claims about its products and services, a business takes steps to properly understand the impact, good or bad, that they might have and be able to produce evidence to support those claims.
If you’re looking for the most up-to-date knowledge and legal advice regarding The Digital Markets, Competition and Consumers Act, our expert commercial team are on hand to help. To get started, call Paul Lupton, Partner and Head Of Commercial on 0161 930 5102 or email him at Paul.Lupton@Gorvins.com