Green claims in the fashion retail sector

CMA message to fashion retail sector clear… Any business making green claims should act now to ensure compliance with consumer protection law.

On 27 March 2024, the CMA concluded its first sector-specific consumer protection investigation into sustainability claims following its publication of the Green Claims Code.

The investigation focussed on whether green claims made by ASOS, Boohoo and George at Asda may have misled consumers and put to the test, for the first time, the broad questions and principles set out in the Green Claims Code.

The investigation concluded with all three businesses entering into undertakings regarding their future use of green claims, providing the sector with welcome and much needed clarity on how the Green Claims Code operates in practice within online and in-store fashion retail settings.

Amongst other things, the undertakings specify that:

• All green claims must be accurate and not misleading.
• Any information that is key to the understanding of green claims must be clear and prominent, meaning it must be expressed in plain language, easy to read and clearly visible to shoppers.
• Statements made about materials in green ranges must be specific and clear, such as ‘organic’ or ‘recycled’, and care should be taken to avoid ambiguous terms like ‘eco’, ‘responsible’ or ‘sustainable’ without further explanation.
• Where a product is claimed to contain recycled or organic fibres, the percentage of such fibres should be clearly displayed and easy for customers to see.
• Products should not be called “recycled” or “organic” unless they are made entirely of recycled or organic fibres, or unless the percentage of non-recycled or non-organic fibres is negligible.
• The criteria used to decide which products are included in green ranges must be clearly set out and must detail any minimum requirements for inclusion in the range. Products should only be included in green ranges if they meet all of the relevant criteria.
• Businesses should not use ‘natural’ imagery – such as green leaves – logos or emojis in a way that suggests a product is more environmentally friendly than it actually is.
• Any claims made to consumers about environmental targets must be supported by a clear and verifiable strategy, and customers must be able to access more details about those strategies. These details should include what the target is aiming to achieve, the date by which it is expected to be met, and how the business in question will seek to achieve that target.
• Businesses shouldn’t refer to third party accreditations when referring to a Product unless that accreditation scheme signifies that the Product has certain characteristics. Where references are made to accreditations, further information about the accreditation scheme should also be provided.

The CMA’s announcement was also accompanied by an open letter to the sector, urging fashion retail businesses to review their own claims and practices against the undertakings.

It’s evident that environmental sustainability remains a significant priority for the CMA, and the conclusion of its retail fashion investigation by no means marks the end of the CMA’s intervention in the sector. Further guidance building on the CMA’s findings in the sector is expected in due course.

In the meantime, however, the CMA’s position is clear.

Any fashion retail businesses making environmental claims should, as a minimum, meet the standard set by the undertakings entered into by ASOS, Boohoo and George at Asda.

Where businesses continue to fall below the standard set by the undertakings, the CMA will not hesitate in taking further enforcement action.

The CMA also issued the stark warning that, once the Digital Markets, Competition and Consumer Bill is finalised and comes into force, any enforcement action for green claims made in breach of consumer protection legislation could leave businesses on the receiving end of significant fines totalling up to 10% of a business’ worldwide turnover.

Whilst the focus for this investigation has been on the fashion sector, the CMA’s other investigation into Green Claims for household products made by Unilever continues.

The principles from the outcome of this investigation will be useful to consider for any consumer facing business making environmental claims about their products or services.

For further information or to discuss how TLT can support your business please contact our specialist team below.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2024. Specific advice should be sought for specific cases. For more information see our terms & conditions.