CMA publishes guidance for fashion retailers on environmental claims

The question

How best can fashion retailers protect themselves from regulatory action when making green claims?

The key takeaway

The CMA has published further guidance on how fashion retailers can comply with the Green Claims Code; the key set of rules determining whether claims about the environmental impact of products or brands (aka green claims) infringe consumer protection regulations in the UK. Much of this guidance broadly restates existing guidance (see our previous Snapshots article for example), but with some useful fashion-focused features to help retailers understand exactly what does and doesn’t go in the industry. It also heavily features practical examples of certain practices the CMA deems non-compliant.

The background

Green claims have been a hot topic with both the ASA and the CMA for years now, and the CMA in particular has focused in on the fashion sector. Its investigation into fashion concluded with undertakings from ASOS, Boohoo and George at Asda. But that investigation did not mark the end of the CMA’s interest in fashion green claims, noting the ongoing focus of the impact of fast fashion on the environment. This guidance should therefore be seen in the context of anticipated continued scrutiny by the CMA over claims made in this sector.

The development

The CMA has published guidance for all businesses making claims about clothing, footwear, fashion accessories and related services (including packaging and delivery). The CMA’s actions are clearly focused on retailers, but the guidance is intended to be relevant all the way up the supply chain, including manufacturers and suppliers, and wholesalers and distributors. If you are active in the fashion sector, and you are making (or even passing along) green claims, this guidance will be pertinent for you.

The specific recommendations are as follows:

• (predictably) all green claims should be clear and accurate: this applies to all claims, whether made on-product, on apps, websites, and social media (the retailer’s or any other’s)
• don’t hide important information: the CMA is alive to retailers hiding information behind dropdown boxes, website links and QR codes. All of the important information about the claim should be immediately available at the point of purchase
• avoid using unclear terms: “green”, “sustainable” and “eco-friendly” are high-risk terms on the basis they are wide-meaning and therefore incredibly difficult to substantiate. The more specific your green claim is, the more likely you will be able to substantiate it, and the more likely it will be compliant
• do not mislead using imagery and icons: consider the overall impression of each ad that contains a green claim, and how a consumer would interpret it. Note in particular recent ASA guidance, which referenced a consumer “cascade of assumptions” about green imagery which meant certain claims (eg that a product is carbon neutral) could be implied even if those words are never used in the ad
• ensure comparisons are clear: set out a prominent summary of the basis for a comparison when making one. Comparisons should be like for like, consumers should understand what is being compared and the comparison should be fair and clear
• explain clearly any action the consumer needs to take: if a claim is based on the consumer taking a certain action post-purchase, that action needs to be made obvious to the consumer. The example given is a children’s jacket, the hems of which could be unpicked to increase the arm length (making it last longer as the child grows). The details of the unpicking and the knock-on impact on the environment should be made clear
• be clear when using filters and other website navigational tools: the CMA has cottoned on to the use of search result filters such as “sustainable” for products on websites. When such generic tags are applied, they will have to be substantiable for every product on the website with that tag. Where possible, be more specific about the filters eg “50%+ recycled”
• recognise that product ranges are higher risk: certain retailers have a range of products marketed as being more environmentally friendly. Such ranges are more likely to attract CMA attention, and you will want to ensure:

– the criteria for a product’s inclusion is clear and available to consumers
– the name of the range is not misleading in itself, and
– that any marketing of the range is also not misleading.

• describe fabrics clearly and precisely: descriptions should be specific and objective eg “recycled polyester” is preferable to “responsible polyester” because the meaning of “responsible” is less clear. Do not imply that an entire product is made of one fabric (excluding buttons, zippers and threads) if it isn’t. Consider fabric claims by reference to what percentage of the product is made of the subject matter fabric, and include that percentage information in the claim
• ensure you are deploying affiliations and accreditations properly: the CMA is happy for you to share your accreditations at a general level, but when making specific claims based on accreditations, ensure the claims made to consumers align precisely with the details of the actual accreditation you have been given by the third-party accreditor. Consider in particular:

– is the claim misleading about the product as a whole?
– have the benefits of the scheme been summarised?
– have you made your connection to the scheme clear?
– have you provided a link to the scheme’s website?
– have you made further details available to consumers?

• put in place processes to ensure claims are correct: appropriate policies should be put in place, necessary training should be provided to key staff and systems should operate to check the factual basis for claims being made.

Why is this important?

The CMA is paying a lot of attention to this space and, through their previous investigations, they have clearly wised up to certain fashion retailer trends/behaviours. This applies especially to vague claims such as “sustainable” or when marketing on a clear pro-environment platform (eg in respect of a specific range), making regulatory interest much more likely.

Aside from the risk of dealing with a burdensome regulatory investigation, note the CMA’s new powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA) will be coming into force shortly (likely April 2025). After that, the CMA will have the power to issue fines for up to £300,000 (or 10% of your global turnover if higher) for breach of consumer protection laws.

Decisions as to whether such a breach has occurred in this context will be determined by reference to the CMA’s Green Claims Code, and in turn this guidance.

Any practical tips?

Green claims should already be on businesses’ radars and so this guidance is mainly of practical relevance, in that it assists fashion retailers to understand how the rules apply to this specific sector. The basics continue to apply: don’t use vague terms; ensure you can substantiate everything you say; and put yourself in the shoes of consumers when considering how a claim will be interpreted. Where possible, get marketing teams to work forwards and not backwards. That is, start by looking at what you can substantiate, and create your green claim out of that; it’s far riskier to create a claim and then try to reverse engineer any substantiation.

Winter 2024