The UK Competition and Markets Authority (CMA) has announced that it will investigate descriptions and labels used to promote products and services claiming to be 'eco-friendly', amid concerns that they could mislead consumers.
The CMA's investigation
In 2019, UK consumers spent £41 billion on ethical goods and services – almost 4 times as much spent two decades ago. While this is of course to be welcomed, the CMA is concerned that this surge in demand for green products and services could incentivise some businesses to make misleading, vague or false claims about the sustainability or environmental impact of the products they sell.
The CMA is therefore undertaking work to understand better how consumer protection legislation can be used to tackle false or misleading environmental claims that affect consumers.
In particular, the CMA will focus on:
- How claims about the environmental impact of products and services are made.
- Whether such claims are supported by evidence.
- Whether such claims influence behaviour when purchasing goods and services.
- Whether consumers are misled by an absence of information about the environmental impact of products and services.
The CMA plans to look across a wide range of sectors, although it has said that it is likely to focus on the sectors of particular concern to consumers, such as textiles and fashion, travel and transport, and fast-moving consumer goods (which includes food and beverage, beauty, and cleaning products).
The CMA is asking consumers, businesses and stakeholders to complete surveys to assist with their work. This call for information closes on 14 December 2020.
At this stage, the CMA has not reached a view as to whether or not consumer protection law has been broken. However, if it finds evidence that businesses are misleading consumers, the CMA has warned that it will take appropriate action.
Following its investigation, the CMA ultimately intends to publish guidance for businesses looking to make environmental claims. It may also provide advice to government depending on its findings.
The CMA's investigation ties in to its commitment in its 2020-2021 Annual Plan to support the move towards a low carbon economy, something we have previously considered in the context of businesses looking to collaborate on sustainability initiatives (here). The CMA is certainly not the only regulator turning its attention to environmental concerns and sustainability efforts by businesses however. As we have previously reported (here and here), the Advertising Standards Authority has been regularly ruling on green claims made by businesses.
In addition to supporting sustainability, the CMA's press release also gives a further indication of its desire to establish itself as a leading competition and consumer authority on the international stage post-Brexit. The CMA announced that it will work alongside its Dutch counterpart as part of a project with the International Consumer Protection Enforcement Network (ICEPEN). From 9 to 20 November, the CMA will co-ordinate a 'sweep' of randomly selected websites with ICEPEN members, with the aim of identifying the types of misleading green claims being made around the world.