Everything you need to know about the CMA’s plans to stop greenwashing

The CMA has issued a warning that it will take action against any business caught making misleading environmental claims.

This is good news for consumers, who have had to put up with greenwashing for far too long. In this blog post, we’ll discuss what greenwashing is, and how businesses can avoid getting in trouble with the CMA.

With customers moving faster than ever to green alternatives to help combat the environmental crisis, some have been caught in a green lie.

Greenwashing is the act of falsely advertising a product or service as environmentally friendly. This can take many forms, such as claiming that a product is made from sustainable materials, biodegradable, or recyclable when it is not.

In summary, greenwashing is the act of making claims that a product or service is ‘good for the environment’ by dressing up data in a misleading way that will make a company look more favourable than their competitors. The rule of thumb with Greenwashing is that if it seems too good to be true, it probably is. Especially with something as complex and systemic as Climate Change, it is necessary for customers to scrutinise claims and for businesses to promote transparency via communication with stakeholders.

• Vague language
• Using labelling that was not associated to a real accredited organisation
• Misleading the true environmental cost of the product or service

This staggering statistic has now been the focal point of the CMA’s new Green Claims Code and they have now made it their mission to put an end to greenwashing.

The CMA has been clear that any businesses who do not comply with the new code and are found to be greenwashing could face prosecution. This could result in a fine, or in the most serious of cases, imprisonment.

So what can businesses do to prevent greenwashing and communicate clear environmental benefits?

1.  Be truthful and accurate
2. Claims must be clear and unambiguous
3. Claims must not omit or hide important relevant information
4. Comparisons must be fair and meaningful
5. Claims must consider the full life cycle of its products or service
6. Claims must be substantiated

These guides are not new, but rather a set of reinforcements to help make sure businesses to do not lead customers away from making moral and ethical decisions when purchasing

The threats to businesses engaging in greenwashing are severe. Working closely with other government bodies such as Trading Standards, the CMA has said that it will not hesitate to take action against businesses who make greenwashing claims, with potential consequences including:

• Damaging publicity
• Fines
• Imprisonment
• Loss of loyal customers
• Impact on sales
• Demoralised employees, and higher turnover
• Scrutiny from prospective partners

These threats show how seriously the CMA is taking greenwashing and how important it is for businesses to make sure their marketing campaigns comply with the regulations.