Consumers are increasingly prioritising products and services that either reduce harm to the environment or have a positive impact on it. This shift in consumer demand has led to a rapid rise in products, services, and companies claiming to meet these environmental preferences. As the demand for eco-friendly options grows, businesses are eager to align their offerings with these values.
However, consumer protection law does not prohibit businesses from making environmental claims about their products or services, as long as these claims are truthful and not misleading. This law provides a structured framework that allows companies to make environmental assertions in a way that enables consumers to make well-informed purchasing decisions. As a result, consumer protection law plays a crucial role in safeguarding consumers from misleading environmental claims, ensuring that they can trust the information presented to them.
Beyond protecting consumers, consumer protection law also helps ensure fair competition among businesses. It levels the playing field by ensuring that only businesses whose products genuinely offer environmental benefits and can back up their claims with evidence are allowed to market those benefits. This creates an environment where businesses that are genuinely committed to environmental sustainability can compete fairly, without being undermined by false or exaggerated claims from others. Additionally, there are separate regulations in place that offer further protection for businesses from deceptive marketing tactics.
The law thus serves a dual purpose: it helps prevent misleading environmental claims and fosters an environment where businesses are motivated to enhance the environmental performance of their products. By creating transparency around these efforts, the law enables businesses to communicate their genuine sustainability initiatives to consumers, which, in turn, allows them to reap the commercial rewards of their environmentally responsible practices.
The principles are:
• claims must be truthful and accurate
• claims must be clear and unambiguous
• claims must not omit or hide important relevant information
• comparisons must be fair and meaningful
• claims must consider the full life cycle of the product or service
• claims must be substantiated
The Competition and Markets Authority (CMA) is the UK’s primary competition and consumer authority. The CMA’s objective is to make markets work well for consumers, businesses and the broader economy.
The CMA has powers to tackle practices and market conditions that harm consumers and hinder their decision making. The CMA uses its consumer protection law powers to protect consumers from unfair business practices and unfair contract terms (for which it has the lead role). The CMA can go to court to enforce consumer protection law. The CMA also has the power to protect businesses from misleading marketing by other businesses. As part of its role, the CMA produces guidance for businesses to clarify their consumer protection law obligations and promote compliance.
Environmental Claims
Environmental claims are claims which suggest that a product, service, process, brand or business is better for the environment. They include claims that suggest or create the impression that a product or a service:
• has a positive environmental impact or no impact on the environment.
• is less damaging to the environment than a previous version of the same good or service; or
• is less damaging to the environment than competing goods or services.
Environmental claims may concern the impact on the environment in general or on specific environmental aspects such as the air, water or soil. Environmental claims can be explicit or implicit. They can appear in advertisements, marketing material, branding (including business and trading names), on packaging or in other information provided to consumers. All aspects of a claim may be relevant, such as:
• the meaning of any terms used;
• the qualifications and explanations of what is said;
• the evidence that supports those claims;
• the information that is not included or hidden;
• the colours, pictures and logos used; and
• the overall presentation.
Environmental claims are genuine when they properly describe the impact of the product, service, process, brand or business, and do not hide or misrepresent crucial information. Misleading environmental claims occur where a business makes claims about its products, services, processes, brands or its operations as a whole, or omits or hides information, to give the impression they are less harmful or more beneficial to the environment than they really are.
Business-to-consumer claims
Where claims are ultimately aimed at consumers, the guidance will apply, even if the claims are made by a manufacturer, wholesaler or distributor which does not have direct contact with a consumer.
In some cases, retailers and wholesalers (or manufacturers) could be liable for claims under consumer protection legislation. For example, retailers who sell products featuring misleading environmental claims made by manufacturers or wholesalers on their packaging can be liable for those claims (as well as the manufacturer or wholesaler). Retailers should assure themselves that any such claims are accurate and not misleading.
Online marketplaces also have responsibilities where they allow sellers to market products via their platform. They can be liable in relation to misleading environmental claims where they:
• do not take adequate steps to ensure that products being sold on their platform comply with the law, for example, by taking steps to prevent misleading claims and removing claims which they know to be misleading; or
• market themselves on the basis of being a marketplace which specialises in the sale of environmentally friendly products, and where the customer can therefore expect that there has been a degree of curation and control over what is sold by the marketplace.
Business-to-business claims
The guidance also applies (to a more limited extent) to businesses marketing to other businesses. Many businesses, particularly small businesses, are reliant on the information provided to them by manufacturers and wholesalers in order to choose which products they purchase.
The legal framework regulating business-to-business marketing is less comprehensive than for business-to-consumer commercial practices. It prohibits misleading advertising and misleading comparative advertising. Unlike legislation relating to sales and marketing to consumers, it does not prohibit other commercial practices which may mislead by act or omission.
The CMA urges all businesses to act fairly in their transactions with other businesses, particularly where small businesses are concerned. The examples included in the guidance also generally apply where the claims are made by one business in their advertising to another. By applying the same high standards in both business-to-business and business-to-consumer engagement, businesses can support trust in the green economy and mitigate the risk of harm to consumers.
In every case which the CMA investigates or plans to investigate, they will consider carefully which is the appropriate party to investigate, whether manufacturer, wholesaler, or retailer. In particular, they will consider which party is best placed to remedy the issue, and, where appropriate, which is best placed to provide redress or information to consumers.
Consumer Protection
Consumer protection law covers what businesses say, and how they present it, and what they fail to say, about the environmental impacts or credentials of their goods, services, brands and activities. The CMA’s view is that, in practice, the effect of the law is that businesses must ensure that their environmental claims:
• are truthful and accurate;
• are clear and unambiguous;
• do not omit or hide important;
• compare goods or services in a fair and meaningful way;
• consider the full life cycle of the product or service;
• are substantiated.
Businesses making environmental claims may be subject to legal requirements from different sources, including:
• sector- or product-specific requirements (rules that apply specifically to certain areas of economic activity or particular products and services); and
• requirements from general laws that apply to all businesses in order to protect consumers (and competing businesses) or the environment.
Businesses must comply with their obligations from both sources (and any other).
The guidance is about the requirements from the general laws. It is based on consumer protection rules under the Consumer Protection from Unfair Trading Regulations 2008 and Business Protection from Misleading Marketing Regulations 2008. It is not intended to be a one-stop shop for business guidance across any particular sector where specific requirements also apply.
Sector- or product-specific requirements may require that specified information is provided to consumers in a specified way. For example, energy labelling requirements apply to certain household appliances. Where a business is subject to these kinds of requirements, general consumer and environmental protection laws will usually apply to supplement them. They will generally impose additional obligations.
What do businesses need to do?
Businesses making, or considering making, environmental claims need to:
• comply with any sector- or product-specific laws that apply to them or their products and services
• read this guidance and ensure that they are complying with their consumer protection law obligations
• consider carefully whether they need to make changes to their practices
• make any changes necessary to comply with the law, such as:
• stopping making false or deceptive statements
• amending claims to ensure they are compliant
• ensuring they have the evidence to substantiate claims
• ensuring they give consumers the information they need to make informed choices
If in doubt about what it needs to do, a business should seek its own independent legal advice on the interpretation and application of consumer protection law. Businesses can also speak to their Trading Standards Service for advice, for example as part of a primary authority relationship.
If a business does not comply with consumer protection law, the CMA and other bodies, such as Trading Standards Services, can bring court proceedings. In some cases, businesses may be required to pay redress to any consumers harmed by the breach of consumer protection law. The ASA could also take action against misleading advertisements that contravene the CAP or BCAP Codes.
Claims should be worded in a way which is transparent and straightforward so consumers can easily understand them. They should not be presented in ways that are liable to confuse consumers or to give the impression that a product, service, brand or business is better for the environment than it is.
What claims don’t say can also influence the decisions consumers make. Claims made by businesses must not omit or hide information that consumers need to make informed choices. These sorts of omissions can occur where claims focus on saying one thing but not another, or where they say nothing at all. It is vital that businesses pay close attention to the information on environmental impacts that consumers need to make decisions and reflect that in the claims they make.
It is important that consumers are not misled by the way comparative claims are made. This is linked to the principle that claims must be truthful and accurate. Comparisons should be based on clear, up to date and objective information. They should not benefit one product or brand to the detriment of another if the comparison is inaccurate or false.
Most environmental claims are likely to be objective or factual claims that can be tested against scientific or other evidence. Given the requirement that claims must be truthful and accurate, businesses should have evidence to support them.
The CMA may deal with infringements of consumer protection law using a number of different measures. This includes taking civil action and also criminal enforcement. The CMA or another enforcement body may seek an enforcement order from a court against businesses who breach the rules governing consumer protection. The CMA can also accept an undertaking from a trader to stop breaches of consumer protection law.
