From Sunday 6 April, the UK’s Competition and Markets Authority (CMA) has been granted significantly enhanced enforcement powers under the Digital Markets, Competition and Consumers (DMCC) Act. The legislation equips the CMA with the ability to impose direct and severe penalties on businesses found to be in breach of consumer law, including those guilty of misleading environmental claims, or ‘greenwashing’ (words: IEMA)
The legislation represents a vital move forward in consumer protection, allowing consumers to have confidence in the environmental impacts of their purchases.
Sarah Mukherjee MBE, CEO of the Institute of Environmental Management and Assessment, said: “From Sunday, the Competition and Markets Authority (CMA) has new enforcement powers to fine companies up to 10% of their global annual turnover if they deliberately mislead consumers about green claims.
“This decision highlights the importance for organisations to have in-house sustainability professionals who can provide an evidence base against which marketing and product claims can be made.
“Consumers should be able to have confidence that organisations are doing what they say when it comes to environmental and sustainability; we welcome the CMA’s new powers.”
Simon Colvin, an IEMA Fellow and Environmental Law Expert at Weightmans, says the new enforcement powers should not deter companies from making green claims, but should be seen as an opportunity to ensure rigorous governance around sustainability where advertising on this basis is concerned.
“A YouGov survey revealed that over half of UK consumers consider a brand’s environmental credentials when making a purchase. So, it’s not surprising that businesses are using their green credentials to market their products to consumers who want to make better, more ethical choices about what they are buying.
“The Net Zero agenda in the UK has been growing for some time, and it’s an important step bringing green claims into the CMAs wheelhouse in terms of penalties. These new enforcement powers should help to level the playing field where green claims are concerned – we have seen this responsibility taken up previously by the Advertising Standards Authority, so it’s good to see the CMA being given a greater role in this space too.”
“Crucially, the new approach is not a court-based process, meaning the CMA has the power to impose direct penalties on businesses found to be in breach of consumer law by creating misleading environmental claims.”
Colvin says the introduction of the CMA’s new powers on the 6th should be a prompt for UK businesses to invest in sustainability professionals, who can rigorously screen proposed advertising materials to avoid allegations of greenwashing and associated penalties.
“We can expect the CMA to flex its muscles in the coming months, giving out penalties to the worst offenders – we have seen recent reviews across fashion, supermarkets and utilities – to send a strong message against greenwashing. In light of this, companies should consider providing sustainability training to their marketing and sales professionals, to equip them with the knowledge of what claims they can make, and how these should be presented to audiences in the appropriate context to avoid presenting an unbalanced or unfair picture – especially when comparing green claims to competitors – something that should be avoided.”
“Many large businesses will already have the data on their sustainability end environmental impacts thanks to mandatory reporting requirements, so relying on in-house sustainability or ethics experts is also a smart move for marketing and advertising teams.”
