The Competition and Markets Authority (CMA) are undertaking work to understand better how consumer protection legislation can be used to tackle false or misleading environmental claims that affect consumers. These misleading claims are often referred to as ‘greenwashing’.
On 12 December 2023, the CMA announced in a press release that it will scrutinise green claims made by the consumer goods group Unilever in relation to some of their products in the fast-moving consumer goods (FMCG) category. This action follows CMA's wider investigation into greenwashing and their more general announcement, in January 2023, that they planned to expand their work on environmental claims to include FMCG. This follows what has been viewed as a successful review into the fashion sector where the CMA launched enforcement action against well-known fashion brands ASOS, Boohoo and George at Asda.
FMGC
The fast-moving consumer goods category consists of essential items that people use on a daily basis, that are repurchased regularly, such as food and drink, cleaning products, toiletries, and personal care items. Last year, it was estimated that shoppers paid out more than £140 billion in total on FMCG products. This is a particular area of concern for the CMA with Chief Executive, Sarah Cardell stating that:
“Essentials like detergent, kitchen spray, and toiletries are the kinds of items you put in your supermarket basket every time you shop. More and more people are trying to do their bit to help protect the environment, but we’re worried many are being misled by so-called ‘green’ products that aren’t what they seem.”
Red flags identified by the CMA
The CMA has stated concerns regarding certain products produced by Unilever, which manufacturers and brands should consider in respect of FMCG products, including whether:
- certain statements and language used appear vague and broad, and may mislead shoppers regarding the environmental impact of those products.
- claims about some ingredients are presented in a way that may exaggerate how ‘natural’ the product is, and so may create an inaccurate or misleading impression.
- claims focusing on a single aspect of a product may suggest it is environmentally friendly as a whole.
- certain green claims – particularly in relation to recyclability – may be unclear, as they fail to specify whether they relate to all or part of a product, or packaging.
- use of colours and imagery – such as green leaves – may create the overall impression that some products are more environmentally friendly than they actually are.
It is important to note that the CMA is at the initial stage of its investigation. Accordingly, it should not be assumed that Unilever has actually broken consumer protection law.
As reported by the Independent, a company spokesperson for Unilever has stated that: “Unilever is committed to making responsible claims about the benefits of our products on our packs and to these being transparent and clear, and we have robust processes in place to make sure any claims can be substantiated”.
Next steps
The CMA has contacted Unilever and will now use its information-gathering powers to obtain further evidence to progress its investigation. Possible outcomes of the investigation could include securing undertakings from Unilever that commit the company to change the way it operates; taking the company to court under the CPR; or closing the case without further action.
Under the Digital Markets, Competition and Consumer Bill, which is currently progressing through Parliament, the CMA will have new enforcement powers to enforce breaches of consumer regulation as opposed to going to through the courts. When finding a breach of the rules the CMA will be able to impose fines of up to 10% of annual global turnover of the businesses involved. For more information on this, see our article, The Digital Markets, Competition and Consumers Bill: consumer law changes (burges-salmon.com).
General Comment
In a bid to capitalise on growing consumer appetite for environmentally friendly goods and services, companies are often tempted to emphasise their green credentials. However, in light of increased regulatory scrutiny, it is vital that businesses carefully consider any environmental claims against relevant guidance to ensure they avoid misleading customers, which could result in potential civil and criminal penalties, reputational damage and action from the Advertising Standards Authority or CMA. The key considerations for businesses are:
- How are claims about the environmental impact of products and services made?
- Are the claims supported by evidence?
- May the claims influence peoples’ behaviour when purchasing such goods and services?
- Is the business misleading consumers by an absence of information about the environmental impact of products and services?
For more information see our article, How 'Green' are you? 'Greenwashing' claims scrutinised by regulators (burges-salmon.com) for in depth details on the legal position on greenwashing, including a breakdown of the Green Claims Code - the CMA’s key document for considering Greenwashing in the scope of consumer protection.
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This article was written by Abbie McGregor.