Green claims update: September 2024

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 publishes green claims guidance for the fashion retail sector

On 18 September, the CMA published new green claims guidance for fashion retailers following its investigation into green claims in the sector earlier this year. The guidance broadly reiterates the principles from the CMA's undertakings recently agreed with ASOS, Boohoo and George at Asda (details here). It also includes illustrative examples of good/bad practice to help retailers comply.

ASA rules against misleading Virgin Atlantic ad

The Advertising Standards Authority (ASA) has ruled that a radio ad in which Virgin Atlantic claimed have become "the world’s first commercial airline to fly transatlantic on 100% sustainable aviation fuel" risked misleading consumers about the fuel's environmental impact, despite the term "sustainable aviation fuel" (SAF) being widely used in the aviation sector and by government bodies.

Worcester Bosch to improve ad practices after CMA investigation

Following an investigation by the CMA, Worcester Bosch has agreed to withdraw or change its "hydrogen-blend ready" boiler advertising claims. The CMA had expressed concern that the claims gave consumers the false impression that the boilers could help them reduce their carbon footprint and ‘future-proof’ their heating system, which was not guaranteed. This follows the CMA's guidance on 'marketing green heating and insulation products' published earlier this year.

CMA sheds light on enforcement approach under the DMCC

In its recent consultation, the CMA has shed further light on its direct enforcement approach under the Digital Markets, Competition and Consumers Act 2024. Whilst the CMA will continue to investigate potential consumer law breaches through the use of information notices and seek voluntary settlements with companies through undertakings, the consumer regulator will soon be able to issue direct infringement decisions and significant monetary penalties, which are appealable to the courts. Penalties will be calculated based on the company's turnover, the seriousness of the infringement, the level of culpability and the harm caused. The CMA's new powers are expected to come into force next year, potentially signalling a more litigious consumer regulatory landscape in the UK.

ASA publishes dedicated green claims hub

The ASA has published a dedicated page pulling together its "Key Advice Resources on Green Claims" to help marketers "get it right first time". The ASA will update this periodically. Interested parties can sign up to receive future articles.

Sector-specific updates

Aviation

The Civil Aviation Authority (CAA) is consulting on draft principles for the aviation sector, setting out how airlines should communicate environmental information to help consumers make informed choices when booking flights. Under the draft principles, airlines and third-party publishers (such as online aggregators) must ensure that information about the emissions associated with flights is accessible, consistent and transparent to consumers, including clearly explaining how any emissions have been calculated. The CAA proposes to implement the final principles through guidance followed by annual reports 'naming and shaming' airlines that do not comply. The consultation is open until 15 October, with the final principles expected to be published early next year.

Finance

The Financial Conduct Authority's new sustainability disclosure and labelling (SDR) regime took effect on 31 July 2024. The new investment labels are intended to help consumers distinguish between different types of sustainable investment funds and include: "sustainability mixed goals", "sustainability improvers", "sustainability impact" and "sustainability focus". Firms must comply with specific criteria to be able to use the labels and must notify the FCA when doing so. The FCA has also recently announced it is offering limited temporary flexibility until 2 April 2025 for certain firms to comply with the FCA's 'naming and marketing' rules (the next phase of its SDR regime) which are due to come into force on 2 December 2024.

Publications

• ASA publishes research on green claims in food & beverage industry
• EU cracks down on greenwashing in aviation
• Staying green and true: navigating the new FCA anti-greenwashing rule