Green Claims Back On The Agenda: CMA Issues New Guidance On Getting Green Claims Right, Across The Supply Chain

Although the CMA has been focusing on fake reviews and drip pricing in recent months, it is still very interested in green claims. It recently issued new  guidance on getting green claims right across the supply chain. It sits alongside the CMA's  green claims code which it published in 2021 and a  compliance guide for the fashion industry which it issued in September 2024, as well as the ASA's  guidance on green claims. 

The guidance aims to help businesses understand supply chain responsibility for green claims and clarify what this means in practice for different businesses and how to manage legal risk. It sets out the factors the CMA will consider when considering how best to tackle concerns. It includes examples and checklists to help businesses to understand what they need to do when working with other businesses in the supply chain to help ensure that claims are not misleading.

The CMA says that it recognises that businesses may need to work together to follow environmental sustainability initiatives. It has published the  Green Agreements Guidance to support businesses operating at the same level of a supply chain with their competition law compliance.

The CMA makes clear that it is likely to target conduct which is more harmful to consumers and says that it will probably view practices as particularly egregious where businesses should already know what their consumer law obligations are. For example, this might be where the CMA or another regulator has published guidance, or where there has been previous CMA action or clear decisions from bodies such as the ASA. The CMA highlights that these may be relevant to a business even if the guidance or decision refers to another sector. As an example, if another business has been the subject of a ruling by the ASA, don't ignore it, thinking it doesn't affect you.

The CMA will also go after businesses which do not have appropriate internal processes in place to help make sure that their environmental claims are accurate and do not mislead consumers (or fail to properly follow such processes where they are in place). This means having a robust sign-off process for advertising material.

When it comes to enforcement, the CMA may also look at whether any enhanced consumer measures are appropriate, and if so, which business or businesses would be best placed to implement them. This may include measures to remedy the issue, prevent it from happening again and, where appropriate, providing consumers with redress and/or the information they may need. When it is calculating a fine for an infringement of consumer protection law, the CMA will consider factors including the seriousness of the infringement (in particular the level of harm and the level of culpability of the business or businesses), the size of the business and any mitigating or aggravating circumstances. Depending on the facts of a particular case, proactive steps taken to cease and correct infringing conduct before the CMA launches an investigation may be regarded as a mitigating factor.

As well as various examples of good and bad practice, the guidance includes checklists:

Checklist for retailers:

Retailers need processes to ensure that robust, credible and up-to-date evidence is obtained. This may include:

• seeking evidence from suppliers before advertising or selling products to consumers.  This evidence should be robust, credible and up to date. The type of evidence may vary according to the claim and the type of product, service or sector;
• asking suppliers and brands to provide confirmation, such as via a self-assessment questionnaire, that they hold the relevant proof or a declaration that claims are accurate. This may be particularly relevant in situations where it is not always possible to obtain evidence for every product (for example due to timing factors, or as the available evidence would reveal confidential information);
• reviewing claims and documentation on a regular basis. For example, conducting regular checks where appropriate to ensure that product information is accurate. This may include carrying out random checks of product descriptions and requesting copies of evidence to support a selection of claims from suppliers;
• putting additional measures in place when working with new suppliers.  This includes checking whether any change in supplier affects any claims being made;
• seeking updates and maintaining regular contact with suppliers to check for any changes in the supply chain that may affect the accuracy of a claim.  Such changes should be carefully considered to assess any impact on making environmental claims; and
• considering if environmental claims made about products provided by suppliers, including on labelling, are clear and whether additional information is required from the supplier for the consumer to understand the claim.

Checklist for brands selling through third party retailers:

• Ensure that any claims the brand makes are accurate  and verified, with up-to-date, credible evidence; and
• Provide retailers with appropriate assurance that claims the brand makes are correct, including (where appropriate) sharing underlying evidence  with retailers and explaining the basis on which the brand's environmental claims are made. An example would be providing evidence which verifies the product composition. If it is not possible for the brand to provide a copy of the evidence at the time the claim is being made, for example due to timing factors, an alternative may be to provide a declaration that product information is accurate.

Checklist for suppliers and manufacturers: 

• Provide retailers and brands with the assurance  they need so that they can confidently make accurate  claims. This includes obtaining and providing, as appropriate, relevant evidence  to support claims and retaining proper records on aspects such as product composition, testing and provenance;
• Ensure that systems are in place for verifying  environmental claims, for facilitating supply chain transparency and providing updates as necessary (for example, if there is a relevant change to the raw materials used);
• Consider providing assurance in a different way, if product information is confidential. For example, rather than disclosing a manufacturing method or detailed composition, providing evidence of an independent verification process; and
• Avoiding making casual claims which may be taken for a verifiable claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.