CMA’s New Guide for Fashion Brands: A Crackdown on Greenwashing and Misleading Environmental Claims
An example of potential greenwashing. Credit: https://commons.wikimedia.org/wiki/File:020170917_133644_SMOG_men%27s_fashion,_clothing_tags.jpg#filelinks
By Alix Coombs
The UK’s Competitions and Markets Authority (CMA) has ramped up its efforts to hold fashion brands accountable for greenwashing with a newly issued guide tailored specifically for the sector. Released in September 2024, Complying with Consumer Law When Making Environmental Claims in the Fashion Retail Sector provides a clear framework for fashion brands to ensure their sustainability claims are truthful, transparent, and backed by evidence. This initiative marks a significant milestone in promoting accountability and tackling deceptive marketing practices in an industry increasingly scrutinized for its environmental impact.
Combatting Greenwashing
As sustainability becomes a key driver of consumer behaviour, fashion brands are increasingly trying to capitalize on this demand by marketing themselves as eco-friendly, whether or not their claims are truthful.
The CMA’s new guide builds on the existing Green Claims Code to directly address this issue by outlining what fashion retailers must do to comply with UK consumer protection law when making environmental claims. It sets out clear expectations for businesses to avoid misleading consumers and helps to ensure that brands making genuine efforts toward sustainability are not overshadowed by those engaging in greenwashing.
Key Principles of the CMA’s Guidance
The CMA guide is built around six core principles that fashion brands must follow to ensure their sustainability claims are in line with consumer protection law:
Truthfulness: All environmental claims must be truthful and accurate. If a garment is labelled as "recycled," "organic," or "sustainable," it must genuinely meet the standards implied by these terms. Brands are advised to avoid overstatements, ensuring that the specific aspect of sustainability being promoted is clearly defined.
Evidence-based Claims: Brands must be able to substantiate their environmental claims with reliable evidence. This includes providing data or credible third-party verification to support any assertions about the sustainability of their products or practices. Without concrete evidence, brands risk breaching consumer law.
Clarity and Accessibility: Sustainability claims should be easy to understand and clearly communicated to consumers. Avoiding vague or broad language is key. Terms like "eco-friendly" or "green" without further explanation can be misleading. Consumers should not need to perform extra research to understand what makes a product sustainable.
Consideration of the Full Lifecycle: The environmental impact of a product should be considered across its entire lifecycle—from sourcing raw materials and manufacturing to its use and disposal. For example, a brand cannot claim a product is sustainable simply because it uses organic cotton, if the garment has a significant environmental footprint in other areas, such as water use during manufacturing or waste generated at the end of its life.
Comparative Claims: If a brand makes comparative claims (e.g., "more sustainable than previous collections" or "greener than our competitors"), these must be based on clear and verifiable comparisons. The differences should be specific and measurable, rather than vague or subjective.
Consistency Across Business Practices: Environmental claims should reflect the overall practices of the business. A brand cannot advertise one "sustainable" product line while engaging in unsustainable practices elsewhere in the business. The CMA calls for consistency to ensure brands present an accurate picture of their sustainability efforts.
Common Pitfalls for Fashion Brands
The CMA has identified several practices that could land fashion retailers in trouble under consumer law:
Selective Disclosure: Brands that highlight only the positive aspects of their environmental impact while ignoring the negative will face scrutiny. For example, promoting a product as made from recycled materials while ignoring the carbon emissions from the production process can mislead consumers.
Omnichannel Misalignment: When brands market themselves across different platforms, consistency in messaging is critical. The CMA warns against making environmental claims on social media or through influencers that are not aligned with the information provided on official websites or product labels.
Misleading Use of Certifications: The CMA cautions against using eco-labels, certifications, or buzzwords that could be misleading if they aren’t supported by the full context. For instance, a brand should not use a certification label in a way that implies the entire product meets the standard if only part of it does.
A Proactive Approach to Compliance
In addition to issuing the guide, the CMA has taken direct action by advising 17 well-known (but unnamed) fashion brands to review their business practices. These letters were sent to highlight concerns regarding the accuracy of their green claims, particularly focusing on the use of broad or ambiguous terms like “eco-friendly” or “sustainable” without providing clear evidence. The CMA also raised the issue of products being inappropriately included in so-called "eco" ranges without justifiable reasons.
These letters serve as a reminder to brands that misleading consumers can have serious consequences. With the upcoming Digital Markets, Competition and Consumers Act 2024, the CMA will soon gain strengthened enforcement powers. This new legislation will enable the authority to impose fines of up to 10% of a business’s global turnover if it is found to be in breach of consumer law.
The CMA’s warning is clear: businesses that fail to meet these standards could face severe consequences, making it imperative for fashion brands to audit their practices and ensure that all sustainability claims are honest, precise, and backed by solid evidence.
What Does This Mean for Fashion Brands?
Fashion brands must now take a proactive approach to ensure compliance with the CMA’s guidance. This will likely involve a comprehensive audit of current sustainability claims, ensuring that all marketing materials—from product labels and advertising to social media posts—accurately reflect a product’s environmental benefits.
Transparency will be critical moving forward. Brands that invest in authentic sustainability initiatives and provide clear, evidence-backed claims are likely to stand out in a market increasingly dominated by eco-conscious consumers. For those that fail to comply, the CMA has made it clear that the penalties for greenwashing could be severe, both financially and in terms of consumer trust.
Moving Toward Genuine Sustainability
Ultimately, brands must not only comply with the law but also strive to foster a culture of genuine sustainability. Only by embedding ethical and environmentally responsible practices into the core of their operations can the fashion industry begin to address its significant environmental challenges.
While there is a long way to go to seeing true sustainability permeate the ethos of fashion brands everywhere, this is a positive step in the right direction.