UK Fashion Giants Agree to Address Greenwashing Practices in CMA Agreement

This week, the United Kingdom’s (UK) Competition and Markets Authority (CMA) announced it had entered into agreements with ASOS, Boohoo and Asda to ensure the fashion giants do not engage in greenwashing practices.

The three companies entered into the agreements voluntarily, and the CMA emphasises that this does not automatically imply that they previously breached any applicable greenwashing laws. Each fashion company signed a different agreement, with binding commitments tailored to their respective business models and the outcomes of a CMA investigation into greenwashing practices in 2022. Commitments apply broadly to each of the following brands: Asda’s agreement applies to George at Asda; Boohoo’s agreement applies to boohoo.com, boohooman.com, dorothyperkins.com, oasisfashion.com, and prettylittlething.com.

The intention behind the agreements is to set a standard for the UK fashion industry. Other companies are encouraged to also follow the commitments made and to review their own practices to prevent greenwashing. Chief Executive of the CMA, Sarah Cardell, said: “The commitments set a benchmark for how fashion retailers should be marketing their products”.

UK Fashion Companies' Anti-Greenwashing Commitments

To ensure that the millions of consumers who shop at the three companies can trust their green claims, the following undertakings were made:

1. Green claims must be accurate and may not mislead consumers. Relevant information about a product’s sustainability must be displayed prominently, in plain, visible, and accessible language.
   

2. Any statements about green fabrics (‘organic’, ‘recycled’, ‘eco’, ‘responsible’, or ‘sustainable’) must be specific, clear, and unambiguous. If only a part of the material is green, the percentage must be clearly displayed. There are also certain requirements for products to be called ‘recycled’ or ‘organic’.
   

3. If an entire collection is marketed as green, the requirements for products to be included in the collection must be clearly set out.
   

4. The companies will not use any images that may imply that the product is greener than it is in reality (for example, a tree).
   

5. When using filters in an online store, green filters must only show products that meet the filter requirements (e.g. ‘recycled’).
   

6. Environmental targets must be clear and supported by a verifiable strategy that includes targeted achievements, deadlines, and methods.
   

7. Statements about accreditation schemes and standards must not be misleading.

Additionally, all three firms are also required to report to the CMA regarding their compliance with the above commitments and progress made.

At the time the CMA announced the agreements with the three companies, it also published an open letter to the fashion industry. In the open letter, the CMA highlights that it published the UK Green Claims Code with the aim of giving “businesses the confidence to make accurate and truthful environmental claims”. The agreements between the CMA and the three companies build on the principles of the Green Claims Code.

What is the UK’s Green Claims Code?

The UK Green Claims Code (the Code) came into effect in September 2021. The Code applies to all UK companies that make environmental claims. As per the Code, green claims are claims “that show how a product, service, brand or business provides a benefit or is less harmful to the environment”.

The definition of green claims under the Code is broad and includes both explicit and implied statements. The medium in which the claims appear is not relevant. Any aspect of the claim or its appearance is relevant, including terms used, explanations, evidence, omissions, colours, pictures, logos, and overall presentation. According to the Code, green claims can be made to consumers, and to a more limited extent also to other businesses.

The Code falls under consumer protection law and helps consumers make informed purchasing decisions. The six main principles of the Code are:

1. Claims must be truthful and accurate;

2. Claims must be clear and unambiguous;

3. Claims must not omit or hide important relevant information;

4. Comparisons must be fair and meaningful;

5. Claims must consider the full life cycle of the product or service; and

6. Claims must be substantiated.

The CMA intends to expand the Code with principles or guidelines tailored specifically to the fashion industry, to further prevent UK fashion companies from greenwashing.