On 26 January 2023, the CMA announced that it is expanding its work on green claims with a review into Fast Moving Consumer Goods (FMCG).
This follows the CMA’s guidance in September 2021 on making environmental claims on goods and services, designed to help business understand and comply with existing obligations under consumer protection law when making green claims. The CMA also produced the Green Claims Code with a checklist of key points for businesses to assess the compliance of their environmental claims and avoid greenwashing.
But this guidance came with a health warning that enforcement action was likely to follow for businesses that did not address any non-compliant practices and, in January 2022, the CMA turned to the fashion sector and launched an investigation into several well-known brands, focusing on green claims about fashion products.
This latest CMA review into FMCG is an expansion of the ongoing work into ‘greenwashing’ and will focus on a wide range of ‘essential items’ which consumers use on a daily basis and regularly repurchase, including food and drink, cleaning products, toiletries, and personal care items.
The CMA will be looking into green claims on FMCG products to assess their compliance with consumer protection law. The claims analysed will include those made both in store and online, in all forms of media (website, app, influencer advertising etc). There will be a particular focus on whether the claims comply with the Green Claims Code, including any problem areas such as:
- Vague/broad statements such as the use of ‘sustainable’ or ‘better’ for the environment
- Misleading claims about the use of recycled or natural materials or a ‘green’ production process – with an eye on the whole lifecycle of the product
- How recyclable a product is in reality, including all elements of the packaging
- Whether the claims are truthful and accurate – and most importantly, whether they can be substantiated by the business.
What can brands do?
If you think your business might come under the spotlight of the CMA, there are a number of things you can be doing to prepare:
- review your green claims – can you back up claims with robust, credible and up to date evidence?
- ensure there is a robust internal sign-off process on any green claims made
- ensure the different business functions understand the importance of compliance with consumer laws around green claims – and any subsequent CMA review
- choose the right internal and external investigations team, ready to act promptly
- have appropriate processes in place to preserve data and respond to information requests
If you would like to discuss compliance with consumer laws around greenwashing or what steps your company can be taking for ‘CMA readiness’, please do reach out to Julia Hemmings or Helen Brown.