Insights Misleading environmental claims in fashion: Competition and Markets Authority issues open letter

The Competition and Markets Authority (“CMA”) has issued an open letter to the fashion retail sector about environmental claims and commercial practices. It comes as the CMA secured undertakings from three major retailers following an investigation into how products and services claiming to be ‘eco-friendly’ are being marketed, and whether consumers could be being misled.

Those undertakings include commitments from the retailers to ensure that all green claims are accurate, clear, prominent, and not misleading. Furthermore, it was agreed that statements should not use ambiguous language such as ‘eco’ or ‘responsible’ nor use ‘natural’ imagery such as green leaves to suggest a product was more environmentally friendly than it in fact is.

The letter suggests that fashion retailers familiarise themselves with the commitments in the undertakings and “take all necessary steps to ensure that any environmental claims they make comply with consumer protection law, including that their processes to ensure compliance are robust”. It also draws attention to the CMA’s Green Claims Code which, in addition to those matters contained in the undertakings, sets out the expectations on businesses to ensure that their environmental claims are not misleading and help make consumers make informed choices.

The letter confirms that “promoting environmental sustainability remains a priority for the CMA” and that enforcement action may be taken where the CMA receives intelligence that companies are failing to comply with the relevant consumer protection law. It also looks ahead to the Digital Markets, Competition and Consumers Bill which, if passed into law, would enable the CMA to impose significant monetary penalties of up to 10% of a business’s worldwide turnover if it were in breach of certain consumer protection legislation.

The letter, which can be read in full here, also states that the CMA intends to publish further guidance for the fashion industry “in due course”.