New enforcement powers targeting greenwashing in the UK should act as a catalyst for businesses to ensure ‘rigorous governance’ around sustainability messaging, the Institute of Environmental Management and Assessment (IEMA) has said.
On 6 April, the UK’s Competition and Markets Authority (CMA) was granted new powers under the Digital Markets, Competition and Consumers (DMCC) Act, which enables it to impose direct penalties on firms that are found to breach consumer law, including on matters related to misleading environmental claims.
The new enforcement powers enable the CMA to fine companies up to 10% of their global annual turnover if they are found to deliberately mislead consumers about green claims.
Evidence base
Following the announcement Sarah Mukherjee MBE, CEO of the Institute of Environmental Management and Assessment, commented, “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.”
Echoing her sentiment, Simon Colvin, an IEMA Fellow and environmental law expert at Weightmans, said that the new enforcement should be viewed as an opportunity for businesses to get their house in order when it comes to green marketing.
“A YouGov survey revealed that over half of UK consumers consider a brand’s environmental credentials when making a purchase,” he said. “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.”
Noting that the net zero agenda has been “growing for some time” in the UK, the new powers mark an important step forward for the CMA, he added.
“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.”
From words to actions
Colvin added that he expects the CMA to start to put its new powers into practice in the coming months, singling out businesses that have been accused of making false environmental claims, in order to send a strong message.
“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,” he added. Read more here.
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