Trade Advice Document

Businesses need to ensure that environmental claims made about their products or services are not misleading

This guidance is for England, Scotland and Wales

The demand for 'environmentally friendly' products and services has increased over recent years and there are sound business reasons for businesses to improve the environmental impact of their products and services, enhancing their 'green' credentials and demonstrating a responsible approach to trading.

Sustainability is now firmly on the agenda for consumers and investors who are concerned about our planet. As demand for eco-friendly products and services grows, so too does the risk of companies overstating their sustainability credentials in order to attract and retain those consumers and investors; this is commonly known as 'greenwashing' or the 'green sheen'.

To help businesses ensure that any environmental claims they make do not breach consumer protection law, the Competition and Markets Authority has published CMA Guidance on Environmental Claims on Goods and Services (the 'Green Claims Code').

THE LAW

As with any claims, in order to comply with consumer law, environmental claims must be clear and accurate and not mislead consumers. This is covered by the Consumer Protection from Unfair Trading Regulations 2008 (known as the CPRs), which control unfair practices used by traders when dealing with consumers, and create criminal offences for traders that breach them.

Businesses must be aware that the law considers the 'average consumer' (as opposed to a specific individual consumer) with regard to a particular action or omission under the CPRs. Many 'green' or 'sustainable' products and services are higher in price, and many consumers require more detail regarding a claim in order to make a transactional decision.

The Business Protection from Misleading Marketing Regulations 2008 (known as the BPRs) provide similar protection for business-to-business advertising and comparative advertising.

Further information on the CPRs and BPRs respectively can be found in 'Consumer protection from unfair trading' and 'Business-to-business marketing', including (in the CPRs guide) information on what constitutes a 'transactional decision'.

WHAT ARE ENVIRONMENTAL CLAIMS?

Environmental claims may be made about a product or service, but they can also cover processes that relate to the product or service, a brand or the business as a whole. They may relate to specific environmental impacts such as 'carbon-neutral' or 'organic', or be more general such as 'eco-friendly' or 'sustainable'. They may be explicit or implied, appear on advertising, other marketing material, or on the packaging or other information supplied to consumers. Generally, the more specific the claim the easier it is to ensure clarity.

All claims made must be accurate and properly describe the impact on the environment; they must not hide or misrepresent important information. Neither the CPRs, the BPRs, nor the Green Claims Code set specific rules on which claims can or cannot be made, but they set some general principles. Note that there may be product or sector-specific requirements that apply in addition to these - for example, energy labelling requirements on household appliances, or energy labelling on lightbulbs and lighting. It is also an offence to make claims that appear to be beneficial when they are in fact just a legal duty, such as a cosmetic facial scrub stating 'Save our seas - this is microbead-free!'

GENERAL PRINCIPLES

The Green Claims Code states that all "aspects of a claim may be relevant, such as:

the meaning of any terms used;
the qualifications and explanations of what is said;
the evidence that supports those claims;
the information that is not included or hidden;
the colours, pictures and logos used; and
the overall presentation."

The Code sets out six principles, which businesses need to consider when making claims, to ensure they do not breach the CPRs or BPRs.

The Code's six principles are as follows.

"Claims must be truthful and accurate"
Claims should not give the impression of a bigger environmental impact than is actually being made. If there are restrictions, conditions or caveats on the claims, these must be clearly communicated. Claims must also make clear what the actual environmental benefit is. Businesses should not focus claims on a minor part of what they do, if their main or core business produces significant negative effects.

"Claims must be clear and unambiguous"
General and vague statements are more likely to be misleading. Future goals or ambitions must be communicated clearly and must be backed by strategy and measurable commitment. The language needs to be easily understood by the targeted consumer or client.

"Claims must not omit or hide important relevant information"
What claims don't say can also influence the decisions that consumers make. Consumers need enough information to make informed decisions. Businesses can choose how they communicate all the information needed with regard to the claims they are making, but the claims must be clear.

"Comparisons must be fair and meaningful"
Comparisons need to be based on clear, up to date and objective information, on a 'like for like' basis. Comparisons can be made against competitors or a business's own products and services (old and new versions). They should only be made between important, verifiable and representative features or aspects of the relevant products or services. The same methodologies must be used to calculate, for example, recyclable content or CO₂ emissions.

"Claims must consider the full life cycle of the product or service"
This means that information about the full life cycle of a product or service must be included in every claim. Consumers are increasingly aware of, and concerned about, the environmental impact of what they buy. This includes the impact of individual components or ingredients, and the stages of the production or disposal of a product. Businesses must therefore consider what elements of the life cycle of a product or service are most likely to be of interest to consumers when making an environmental claim, and how they affect the accuracy of that claim.

"Claims must be substantiated"
Businesses must be able to demonstrate evidence for a claim. Claims are less likely to mislead where the supporting evidence is publicly available; it needs to be clear where and how consumers can verify the claims, or where there has been independent certification. Broader and more ambitious claims may be more difficult to substantiate, particularly where they are also ambiguous.

The Code provides more detailed guidance and examples, which businesses making such claims should consult and amend their practices accordingly.

CMA GUIDANCE FOR SPECIFIC BUSINESS SECTORS

The CMA has published some sector-specific guidance on green claims:

TRADING STANDARDS

For more information on the work of Trading Standards services - and the possible consequences of not abiding by the law - please see 'Trading Standards: powers, enforcement and penalties'.

IN THIS UPDATE

Links added to sector-specific guidance from the CMA.

Last reviewed / updated: September 2024

Key legislation

Please note

This information is intended for guidance; only the courts can give an authoritative interpretation of the law.

The guide's 'Key legislation' links may only show the original version of the legislation, although some amending legislation is linked to separately where it is directly related to the content of a guide. Information on changes to legislation can be found on each link's 'More Resources' tab.

Trading standards

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