The Competition Markets Authority (CMA) has published an open letter to all businesses in the fashion retail sector to highlight the need consider consumer protection law and new greenwashing rules when making environmental claims.
The letter has been issued in the wake of a high-profile investigation into claims made and descriptions used by Asda, Asos, and Boohoo over the sustainability of ranges marketed and promoted as ‘green’ to their consumers.
While the CMA found no infringement of consumer law across all three cases, the retailers have since voluntarily committed to set out clearly what products quality for eco range, not to use ‘natural’ imagery such as green leaves to make a product look better than it is, and to give clear information on why fabrics count as ‘sustainable.’
The agreement is a first of its kind and arrives following a regulatory crackdown on ‘greenwashing’ in the fashion sector. The retailers will file regular reports to the CMA.
In a word of caution to the fashion retail sector, the CMA’s open letter to the industry draws attention to its Green Claims Code guidance, first published in September 2021. It makes clear its concern about protecting consumers from misleading environmental claims and has been issued to all businesses in the sector. It reiterates that it ‘wants to give businesses the confidence to make accurate and truthful environmental claims’ that reflect the investments being made into environmental measures while also protecting consumers from misleading claims.
It also makes it clear that the CMA will continue to monitor green claims being made in the fashion retail sector – alongside other sectors – and will consider any intelligence that businesses may not be complying with a view to taking possible enforcement action in the future.
According to the Guardian, MPs are now considering a new law that would impose fines of up to 10% of a business’ worldwide turnover if they breach consumer regulations.
Cecila Parker Aranha, the CMA’s director of consumer protection wrote in the open letter: “Future action by enforcers, including in respect of misleading green claims, could[…] result in the imposition of a penalty.”
