Fashion brands told to ‘stay on the right side of the law’ amid greenwashing claims

Some of the most high-profile fashion brands in the UK have been warned to be clearer on their green credentials by the UK competition watchdog as it clamps down on misleading marketing.

The Competition and Markets Authority (CMA) has issued a new sustainability compliance guide for retailers and told 17 brands to review their practices.

The watchdog has refused to name the 17 brands which it has contacted directly.

The CMA said consumer demand for sustainable products has encouraged brands to frame their goods in an eco-friendly way, even if only certain elements of the supply chain are sustainable and circular.

“This hands-on guide will allow fashion retailers to really get to grips with their obligations under consumer law – and also means there’s no excuse for using misleading green claims,” Hayley Fletcher, interim senior director of consumer protection at the CMA, said.

Fashion brands not not to use ‘misleading imagery’

The guide, which aims to help fashion retailers “stay on the right side of the law”, encourages clarity in messaging across the board.

The CMA said companies should avoid using broad generalisations like ‘green’, ‘sustainable’ or ‘eco-friendly’ and shouldn’t use misleading imagery on ad campaigns.

All information about the product should be available on the tag or description, it said, with no QR codes or links to other websites.

“All fashion companies – from designer labels to budget-friendly brands or independent boutiques – must be transparent and honest with their customers or risk enforcement action,” Fletcher added.

“We’ve cautioned a number of well-known brands to take a close look at their practices, consider this guide, and make sure they’re not overstepping the mark when they promote their green credentials,” she said.

Under the Digital Markets, Competition and Consumers Act 2024, which is expected in 2025, the watchdog will be able to fine businesses up to 10 per cent of their worldwide turnover for breaches of consumer law, including misleading green claims.

“Although addressed to the fashion retail sector, the guidance provides helpful insights for all businesses on the application of the CMA’s Green Claims Code,” Christopher Eberhardt, counsel in the Antitrust, Regulation and Foreign Investment Team at law firm Ashurst, said.

Duncan Reed, partner at law firm TLT said: “The long-awaited tailored guidance for fashion retailers in relation to the Green Claims Code will be welcomed by fashion retailers. Although the Code provides general guidance for businesses on how to use green claims, the fashion industry has a unique set of requirements.

The CMA’s tailored guidance marks a step in the right direction in terms of supporting retailers and being transparent around their obligations towards consumers.  It also gives fashion retailers who are not currently complying with the Code a final chance to make the necessary changes before the CMA gets its enhanced fining powers from spring 2025.”

Investigation into Boohoo, Asos and George at Asda

In 2022, the CMA started an investigation into Boohoo, Asos and George at Asda to scrutinise their fashion claims amid fears of greenwashing. 

The investigation culminated earlier this year with the trio signing undertakings to clarify the way they promoted and displayed their environmental credentials.

“This marks a turning point for the industry. The commitments set a benchmark for how fashion retailers should be marketing their products, and we expect the sector as a whole – from high street to designer brands – to take note and review their own practices,” Sarah Cardell, chief executive at the CMA, said in April.

The compliance guide announced today directly follows on from that investigation, the CMA said.

Last year, the CMA also launched a review of environmental claims in the fast moving consumer goods sector, and has since opened an investigation into Unilever UK to gather evidence on whether the business has broken consumer protection law with regards to its green claims.

“Enforcement against misleading green claims remains a key focus area for the CMA and all businesses should continue to review their claims and internal processes carefully to ensure they comply with the rules,” Eberhardt said.

There has been an overall increase in lawsuits and class action cases over misleading green claims in recent years, with fresh updates to consumer protection law in multiple markets.