Greenwashing: lessons from the CMA’s fast fashion investigation

In January 2022, the UK competition regulator, the Competition and Markets Authority (the “CMA”), launched a review of green claims in the fashion sector. Six months following that, in July 2022, it launched an investigation into environmental claims made by three businesses, concerning fashion products (including clothing, footwear and accessories). The CMA expressed concern across the sector, but honed in on these businesses, in part, simply because of their size and visibility. Having worked with the CMA, on 27 March 2024, forward-looking commitments from the three fashion retailers were published. These commitments agree to implement new standards in the way that green credentials are displayed, described and promoted. These standards impact green claims not only in the fashion sector but also much more widely.

What was the CMA looking for?

The CMA’s initial review of the fashion sector raised concerns about potentially misleading green claims. It found evidence in the sector of unsubstantiated and broad claims about products, such as those described as “sustainable” or better for the planet. The aim of the investigation was to ensure accuracy and transparency. It made various assessments of the businesses’ use of green claims, including: (i) whether green claims being made were too broad and vague; (ii) what criteria was used for including products in collections with green claims (e.g. the percentage of recycled fabric used in the product), and whether the products included actually met that criteria; and (iii) whether enough information was being provided to consumers, including testing if statements relating to accreditation regimes and standards were potentially misleading.

What are the published commitments?

The three businesses have voluntarily, and separately, provided detailed undertakings to the CMA, which include commitments relating to the following broad categories:

1. Green claims accuracy: The three retailers will ensure that all green claims are accurate and transparent. Key information will be prominently displayed in plain language, making it easy to both read and understand.
    
2. Fabric statements: When describing materials in their green ranges, these businesses will be specific and clear. Terms like ‘organic’ or ‘recycled’ will be used over more potentially ambiguous, non-contextual terms such as ‘eco’ or ‘sustainable’, if the product satisfies certain criteria. Additionally, the percentage of recycled or organic fibres will be clearly visible to customers.
    
3. Criteria for green ranges: The criteria for including products in environmental collections will be clearly set out, detailing the minimum qualification requirements for the collection (all of which must be met before the items are included).
    
4. Use of imagery: The businesses will not use “natural imagery” (e.g., green leaves), or any other imagery that implies a product has a greater level of environmental friendliness than it does.
    
5. Product filters: The filters must be accurate. For example, if a consumer filters their search to only capture recycled items, only such items will appear in the results.
    
6. Environmental targets: When making claims about environmental goals, these will be backed up with a clear and verifiable strategy. Customers will be able to access details, including: (i) what the target’s purpose is; (ii) expected completion date; and (iii) the business’ approach to achieving it.
    
7. Accreditation Schemes: Statements regarding accreditation schemes and standards will be clear, and in particular, the businesses will clarify whether an accreditation applies to specific products or their broader practices.

What’s next?

As well as publishing the undertakings, the CMA has confirmed that it will continue its wider investigation into misleading advertising claims, and that other sectors will come under review in due course. So far, we have already seen the CMA broaden its work on environmental claims in January 2024 to include fast-moving consumer goods.

The CMA has also stated that it will build on its Green Claims Code to include specific information relevant to the fashion sector, and has published an open letter to the fashion sector advising all fashion retailers to review their claims and practices.

Whilst the undertakings and the open letter are, on their face, sector specific, the principles are applicable across sectors and will inevitably be applied more broadly going forward.

For more information on sustainability, we encourage you to visit our interactive platform, CMS Green Globe, for updates on sustainability claims and greenwashing in the UK.