On 18 September 2024, the Competition and Markets Authority (CMA) published guidance on complying with consumer law when making environmental claims in the fashion retail sector (Guidance). It provides a practical guide on the CMA’s 2021 Green Claims Code for the sector.
The CMA also sent letters to 17 fashion brands asking them to review their business practices in light of the Guidance.
The Guidance and letters sets the scene for the CMA to take advantage of their new enforcement powers under the Digital Markets, Competition and Consumers Act 2024. It is expected that these new powers (including the power to fine companies up to 10% of annual turnover) will be in force from Spring 2025.
To whom does the Guidance apply?
The Guidance is directly relevant for all businesses who make environmental claims about clothing, footwear, fashion accessories across the whole retail supply chain – but there are also aspects that are relevant to online marketplaces who have functionality that allows search by sustainable criteria.
While the guidance is sector-specific, businesses in all sectors making sustainability related claims can draw lessons from these rules.
The Guidance
- Requirements for environmental claims
- Environmental claims must be clear and accurate. This applies to all uses – whether on a product label, in advertising materials, in store or online, including website information and in social media posts.
- Don’t hide important information from the consumer. Key facts must be presented close to the claim you are making. Consumers should not be required to take further action to locate important information to understand what the claim means. This means that consumers should not have to click on a link, scan a QR code or view the reverse side of a product tag.
Certain supporting information may be displayed through a drop-down field or on an immediately adjacent tag where this is clearly signposted close to the claim. For example, further information about disposal instructions or further details about affiliations and accreditations may be located in a drop-down field or adjacent tag.
- Avoid making broad, general or absolute claims, such as “green”, “sustainable” or “eco-friendly”. The CMA describes the meaning of these words as unclear. If you use these claims, the CMA will expect that you can prove the product as a whole has a positive environmental impact. If you can’t prove this, you need to use more specific language.
- Do not use logos, imagery and icons in a misleading way. Using icons such as earth or leaf symbols are more likely to generate a misleading overall impression of the product’s impact on the environment. The CMA views them as having a similar effect to the general “green” claims mentioned above. Again, if you use these types of symbols or imagery, the CMA will expect that you can prove the product as a whole has a positive environmental impact.
If this isn’t the case, for example, if a product can only be recycled in certain circumstances, it will be more appropriate to use directly relevant imagery such as a recycling logo in place of more general “green” icons or imagery.
- Ensure the basis for any comparison made is clear. Avoid using general comparative language that describes a product as “less damaging” or as using “better materials” without further details. Instead, make clear what the item is being compared to, such as a previous range or a competing product, and provide a summary of what makes it less damaging, or why the materials ae better, adjacent to the claim.
- Online: ensure that filters and navigational tools are not misleading
Filters or drop down menus should not create the impression that products are better for the environment than they are. Instead of grouping products under general filters such as “sustainable” or “recycled”, refer to the specific minimum characteristics of a product, like the percentage of recycled fabric content, that qualify it to fall within that filter.
- Ensure sustainable product names are not misleading and the criteria is clearly disclosed
You should avoid using ambiguous “green” terms to name or describe product ranges. For example, this would include naming a product range “eco-wear” or describing a range as “environmentally friendly”. To avoid misleading consumers, provide a summary of the criteria which links to a fuller explanation and refers to the minimum threshold for inclusion in the range.
- Fabric labelling must be clear and precise
Claims relating to certain types of fabric must refer to the objective properties of a fabric, and must not overstate the fabric’s composition. For example, if a product has any more than a negligible proportion of non-organic content, it cannot be described as an “organic” product. Instead, the specific percentage of the relevant fibres in that product should be disclosed.
- Affiliations and accreditations
Where affiliations and accreditations schemes are referenced, the benefits of the scheme should be summarised, any connections your business has with the scheme should be made clear, and reference to further details should be provided, such as through a link to the scheme website. Claims should not be overstated, and it should be made clear if the claim only relates to a specific aspect of a product’s lifecycle rather than the whole product.
- Environmental targets need to be presented clearly
Environmental corporate targets can only be referenced where there is a clear and verifiable strategy in place to meet those targets. A clear and prominent summary of the nature of the target should be included – and include what the target is aiming to achieve, the date the target will be met and the ways you intend to achieve the target. General and unsubstantiated goals like “creating a better world” should be avoided in favour of specific goals, such as reaching a certain percentage of organic fabrics by a certain time.
- Put in place processes to make sure claims are accurate and can be substantiated
Appropriate processes should be in place to verify and monitor the accuracy of claims made.
- Make sure you have robust documentary evidence to back up your claims before you make them. Evidence should be capable of objective substantiation, relevant and up to date. For further guidance on how to substantiate green claims, see Section 3 (Environmental Claims) of the guidance on compliance with the Committee of Advertising Practice Code.
- Be prepared to get evidence from suppliers and third parties. The responsibility on a business within the scope of the Guidance does not just apply to its own products and claims, but also those made by suppliers and third parties (where it sells third party products). Suppliers should be asked to complete self-assessment questionnaires or provide evidence of an independent verification process. In addition, regular spot checks should be performed to ensure other parties in the supply chain can provide evidence to substantiate their claims.
- Implement internal policies and processes to maintain accuracy. These internal systems should minimise and enable the prompt correction mistakes when listing products for sale and ensure that particular products meet the advertised range criteria. Staff should be regularly trained so that they understand the rules and how they need to be applied in practice.
For further practical advice on implementing the Guidance, please contact our Consumer and Regulatory Investigations team.
With thanks to Elizabeth Barbeary, a trainee solicitor in Baker McKenzie’s London office, who kindly assisted with this post.
