UK competition and markets regulator publishes guide on green laundering ahead of impending enforcement efforts

The UK’s Competition & Markets Authority (“CMA”) has released its much anticipated Green complaint code, the competition and consumer protection regulator providing advice to companies making environmental claims. The new Code ”- which aims to“ help businesses understand and comply with their existing obligations under consumer protection law when making environmental claims ”- applies to all businesses everywhere. market sectors and extends to claims made in advertisements, product labeling and packaging or other accompanying information, including product names, and presumably, any logos or graphics that are used in relation to business goods / services.

Officially released on September 20, the CMA’s Anti-Green Laundering Code focuses on six key principles that businesses should adhere to as part of their marketing / advertising operations. More specifically, the Code states that environmental claims must …

(1) Be “truthful and specific”. Claims “must not mislead consumers by giving them an inaccurate impression, even if the claims are factually correct. They just need to give consumers the impression that a product, service, process, brand or company is as green and sustainable as it really is.

(2) Be “clear and unambiguous”. Claims should be made in a transparent and straightforward manner so that consumers can easily understand them. They should not be presented in a way that confuses consumers or gives the impression that a product, service, brand or business is better for the environment than it is.

(3) Do not omit or hide important information (ie, “the information consumers need to make informed choices.”) The Code notes that “what claims do not say can also influence the decisions consumers make”, and as As such, “It is essential that the information on environmental impacts that consumers need to make decisions and take them into account in the statements they make.”

(4) Include only “fair and meaningful comparisons” which are based on “clear, up-to-date and objective information”. The comparison should “not benefit one product or brand to the detriment of another if the comparison is inaccurate or false”, and rather should allow consumers to make informed choices about “competing products and businesses or between different versions of the same product ”.

(5) Take into account the complete life cycle of the product. When making claims, the Code requires that “companies consider the total impact of a product or service,” noting that “claims can be misleading when they do not reflect the overall impact or when they focus on one aspect of it but not another ”.

All aspects of the environmental impact of a product or service over its lifecycle, including its supply chain, could be important, according to the CMA, including: “its components; how and where it is made, produced or produced; how it is transported from its place of manufacture or origin; its use or performance; disposal of a product and any waste or by-product; the consequences of any claimed environmental benefit and the period over which it would be realized; and whether the product or service has an overall negative impact.

(6) Be justified. Companies should be able to back up their claims with “solid, credible and up-to-date evidence”. The CMA states that “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, companies should have supporting evidence. ”

As part of the Code’s release, the AMC has revealed that it will conduct a full review of misleading green claims both online and offline starting in January 2022, but brands are encouraged not to wait for it to happen. next year to review their claims.

Linklaters LLP attorneys Sara Feijao, Nicole Kar, Vanessa Havard-Williams and Rachel Barrett noted this week that the CMA should “prioritize sectors [it will most immediately] review in the coming months ”, with such target sectors potentially likely to include“ industries where consumers appear most concerned about misleading claims – such as textiles and fashion, travel and transportation, and goods rapidly changing consumer goods (eg, food and beverages, cosmetics and cleaning products). It should be noted, however, that the AMC has underlined that “any sector where [it] notes that important concerns could become a priority, and if there is clear evidence of consumer law violations, [it] may take action before the start of the formal review period.

With that in mind, Feijao, Kar, Havard-Williams and Barrett state that the CMA’s message is clear, “UK businesses have been warned: get your house in order now” new Code. Such ramifications could be compounded by penalties under the UK Broadcast Code and the UK Code for Undisclosed Advertising and Direct and Promotional Marketing, both of which contain sections on environmental claims with similar principles to the new Green Claims Code, according to Rosie Duckworth, a lawyer for Macfarlanes LLP.

42% of complaints

The release of the Green Claims Code comes seven months after the European Commission announced that an in-depth investigation of hundreds of websites and subsequent closer examination of 344 “seemingly dubious claims” across the EU bloc resulted in the conclusion that she had reason to believe that in 42% of the cases of companies making “green” claims, the claims were “exaggerated, false or misleading”. In more than half of the cases, the Commission found that the company making the complaint had not provided “sufficient information to consumers to judge the accuracy of the statement”, while in 59% of case, the company had “failed to provide readily available evidence to substantiate its claim.”

The Commission – which is the EU’s agency responsible for proposing legislation, implementing decisions, enforcing EU treaties and managing the day-to-day affairs of the EU – further told the beginning of this year that in 37% of cases, potentially problematic claims included “vague and general statements” about a product, such as “” conscious “,” environmentally friendly “and / or” sustainable “. which, according to the European Commission, is language which aims to “give consumers the unfounded impression that a product has had no negative impact on the environment”.

At the same time, the CMA, which also collaborated on the sweep launched by the International Consumer Protection Enforcement Network, said companies have also made “unclear” claims, including “references to” natural products. ” without explanation or adequate proof of the claims ”, and in some cases,“ withholding or omitting certain information, such as the pollution levels of a product, in order to appear more environmentally friendly ”. Still, the CMA noted that companies have used “eco-logos and labels” that seem to indicate some sort of sustainability quality, but that are not “associated with an accredited organization”.

The rise of eco-centric efforts by consumer goods brands has led to a proliferation of deceptive marketing in the area of ​​sustainability. Practice guarantees, in large part, because much of the terminology used is often extremely vague (and lacks formal definitions)… and therefore difficult to control from a legal point of view. This is starting to change, it seems, as regulators step up efforts to control the space over initiatives – and new regulations, such as the Green Claims Code, which experts say will have an impact. real – and sustainable – in this space for brands around the world.

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