Green claims update: April 2025

Welcome to our round-up of the key legal and regulatory developments relating to green claims. If you have any questions about this, or about wider ESG and sustainability regulatory developments, please get in touch.

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Key updates

CMA gets significant new enforcement powers

The CMA's new consumer protection enforcement powers under the Digital Markets Competition and Consumers Act 2025 (DMCCA) kicked in on 6 April 2025. The CMA can now directly enforce UK consumer protection laws and issue significant new fines of up to 10% of global annual turnover. Based on the CMA's list of enforcement priorities for the next 12 months, tackling misleading green claims will likely be a continued focus area. Expect early test cases and the likely launch of new green claims investigations (the CMA has issued repeated warnings about this for the last year). Businesses should take stock now to ensure their green claims are in order.

CMA publishes final enforcement guidance

The CMA has published new direct enforcement guidance and rules setting out how it will use its new enforcement powers under the DMCCA. The guidance explains the new (much tighter) timeframes for responding to CMA investigations, how the CMA will calculate any fines, and the new settlement procedure under which businesses can get up to a 40% reduction on any fine (subject to certain conditions including an admission of wrongdoing).

New Unfair Commercial Practices Guidance

The CMA has published a raft of guidance to help businesses comply with the revamped consumer protection rules under the DMCCA. This includes new Guidance on Unfair Commercial Practices. Of most relevance to green claims are the DMCCA's: (1) broadening of key consumer law concepts like 'commercial practices'; and (2) changes to the legal tests around 'invitations to purchase', both of which make it easier for the CMA to take enforcement action in relation to misleading green claims. Further details here.

New guidance on 'biodegradable' and 'compostable' claims

The ASA has published new guidance to help marketers make compliant 'biodegradable' and 'compostable' claims. The guidance sets out key takeaways from recent ASA rulings (such as Bambooi,  Mum & You, and Flooring by Nature). This includes ensuring: (1) claims are properly substantiated; (2) absolute claims relate to the full product lifecycle; and (3) claims don't exaggerate the biodegradable content of a product, or omit material information about the product's ability to biodegrade.

ASA rulings

OceanSaver: The ASA has ruled that OceanSaver's website and TV adverts claiming its dishwasher and laundry tablets "fully biodegrade", "don't harm the sea" and are "plastic free" were not properly substantiated and therefore breached the CAP and BCAP codes. The complaint was brought by Ecover highlighting how businesses can (and are) reporting their competitors to the UK consumer regulators for alleged greenwashing.

Shell: The ASA has ruled that a recent TV advert for Shell did not mislead consumers about Shell's overall environmental impact. Text superimposed over the advert read: "In 2023, 68% of Shell’s global investments included oil & gas, 23% included low-carbon energy solutions and 9% non-energy products". The advert therefore included sufficient 'balancing information' to make it clear to consumers that Shell is involved in both high and low carbon activities and that the majority of its investments are in oil and gas.

Barclays: The ASA has ruled that an advert for Barclays Investment Bank published in The Economist did not mislead consumers. Although the ad did not include information about Barclays' ongoing contribution to greenhouse gas emissions, the ASA found that this was not material information in the context of the ad itself. The advert was focused on promoting the bank's investment services to business readers and was unlikely to be interpreted as representative of Barclay's wider brand activities. Therefore, the omission of information about Barclays' total carbon emissions was unlikely to mislead readers.

TotalEnergies: The ASA has ruled that a paid post on X (formerly Twitter) about TotalEnergies' electricity start-up accelerator program was misleading because it omitted material information about TotalEnergies' overall environmental impact. Although TotalEnergies had placed targeting parameters on the ad to direct it towards business audiences, it was still viewable by the general public. By omitting material information about the proportionof TotalEnergies' business model that comprised lower-carbon energy products, the advert gave a misleading impression about the company's overall environmental impact.

Sectors

Retail:

Blue Yonder's fourth annual Consumer Sustainability Survey reveals that whilst many consumers prioritise sustainability in their purchasing decisions (78%), they are more willing to pay extra for more sustainable products in categories like food, beauty, and cleaning, rather than higher-cost items like electronics and cars. However, trust in brand sustainability claims is low, with only 20% believing brands communicate their efforts accurately.

A German NGO German Environmental Aid (DUH) has won a greenwashing lawsuit against Adidas for misleading "carbon neutral" claims.  The court found that the sportswear giant failed to clearly explain how it would reach its "carbon neutral by 2050" goal and did not disclose whether it would rely on carbon offsetting measures. The EU is currently negotiating a new Green Claims Directive which is expected to include stricter rules on carbon neutral and offsetting claims.

Food & drink:

A  group of food industry executives have published a whistleblowing memo warning investors that the UK food industry faces unprecedented food security threats due to under preparedness for environmental challenges such as "soil degradation, extreme weather events, global heating, and water scarcity". According to the memo, government priorities and short term pressures are resulting in short-termism and a "bias toward pleasing rather than being honest with…directors, shareholders, owners and creditors."

Transport:

Ten car manufacturers have been fined £77million by the CMA after they engaged in anti-competitive behaviour relating to vehicle recycling and associated advertising claims. The manufacturers illegally agreed not to compete against one another when advertising the recyclability of their cars, by agreeing they would not advertise if their vehicles went above the minimum recyclability requirement of 85% (even if the actual percentage was higher). The manufacturers also illegally colluded to avoid paying third parties to recycle their customers’ scrap cars.

A German NGO German Environmental Aid (DUH) has won a greenwashing lawsuit against Lufthansa for misleading sustainability claims. The court ruled that Lufthansa's "offset flight" option was unclear and did not provide sufficient information for consumers to understand what was being offset and how this related to the specific flight they had booked.

Finance:

DWS has been fined €25mn by German prosecutors for misleading statements about its ESG investment products. The asset management firm was found to have used "aggressive advertising" that "did not reflect reality" by claiming that ESG was "part of [its] DNA" and that it was a "leader" in the field. This follows a previous SEC investigation in the United States following which DWS agreed to pay a $19million settlement.

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