“Sustainable”, “recycled”, “organic”: are consumers clear on what these claims mean when it comes to shopping garments? Beyond Corporate Solicitor, Molly Hackett, looks at Greenwashing and what the guidance is for fashion retailers to stay compliant.
Greenwashing is when a brand makes factually incorrect or misleading statements about the environmental performance or impact of its product or service. Often seen as a PR or marketing tactic, greenwashing has become particularly prevalent in the fashion retail industry.
Prompted by observations made during an investigation into the practices of ASOS, Boohoo and Asda, the Competition and Markets Authority (CMA) has recently published guidance targeted at brands in the fashion retail sector on how to make environmental claims in accordance with the Green Claims Code (the Code) and relevant consumer protection law. The Guidance also applies to wider supply chains including manufacturers, suppliers, wholesalers and distributors.
Firstly, why is it important for fashion retailers to comply?
- Incoming legislation: retailers must comply with consumer protection law when making environmental claims. The CMA has stated that following the practical guidance there will be “no excuse for using misleading claims”. The incoming Digital Markets, Competition and Consumers Act 2024 (DMCCA) means that failure to ensure that practices are compliant with consumer protection rules could carry a risk of up to 10% global turnover.
- Consumer trust, supply chain visibility and brand reputation: Consumers are increasingly demanding visibility of supply chains, particularly fast fashion retailers, as well as shopping products and services which are environmentally friendly. Falling foul of the relevant guidance and legislation not only potentially has a financial impact but also a negative effect on building consumer trust and brand reputation.
The Guidance?
While the Guidance ties in fundamental principles that businesses, regardless of the industry or the nature of the claim being made, need to comply with when advertising to consumers. The CMA has offered practical and industry-specific advice on how the Code applies, including:
- Making claims clear and accurate (including any comparisons being made).
- Describing fabrics and materials clearly.
- Ensuring important information about the claim is not omitted.
- Using affiliations or accreditations.
- Using internal processes to audit the claims.
The Guidance demonstrates that the CMA continues to be focussed on fashion retail as a problematic industry for greenwashing, and that further enforcement action may be taken against non-compliant retailers under the incoming DMCCA taking effect in Spring 2025.
[If you are a retailer and need advice on how to comply with the Guidance please get in touch with our specialist team]
