CMA issues new guide to tackle greenwashing in fashion

The UK’s Competition and Markets Authority (CMA) has released a new compliance guide for fashion brands and retailers, designed to help companies align with the Green Claims Code when promoting the environmental benefits of their products. The guide is part of the CMA’s ongoing efforts to tackle greenwashing—where businesses make misleading or exaggerated claims about their sustainability credentials. As part of this initiative, the CMA also sent letters to 17 major fashion brands, urging them to scrutinize their business practices. These letters raised concerns about the use of vague or general terms in environmental claims and the inclusion of products in ‘eco’ ranges that may not meet sufficient sustainability criteria. The CMA’s main objective is to ensure that consumers are not misled by companies’ green marketing strategies. This announcement follows the CMA’s 2022 investigation into green claims in the fashion industry, which was part of a broader probe into potential greenwashing across various sectors. The investigation uncovered instances where companies made claims about the sustainability of their products, such as the use of recycled materials, without providing adequate information about the basis of those claims. These findings prompted further scrutiny into how fashion retailers communicate their sustainability efforts to consumers. In response to the investigation, several high-profile fashion retailers, including ASOS, Boohoo, and George at Asda, signed formal agreements earlier this year to make significant changes to how they advertise the environmental credentials of their products. The agreements aim to ensure that these companies provide clear and accurate information, preventing misleading green claims. The CMA’s new guide outlines key practices for fashion brands, such as ensuring transparency when including items in eco-friendly collections and providing detailed criteria for those collections. It also advises brands to be clear when using filters to help customers search for green products and to specify if environmental claims refer only to certain aspects of a product’s lifecycle. Hayley Fletcher, the CMA’s Interim Senior Director of Consumer Protection, emphasized the importance of transparency in the fashion industry. She warned that companies failing to comply with the guidelines could face significant penalties, including fines of up to 10% of their global revenue. Fletcher urged all fashion brands, from luxury labels to budget retailers, to ensure that their environmental claims are honest and not misleading, or they risk enforcement action.