Greenwashing under regulatory scrutiny – Out-Law.com

Greenwashing under regulatory scrutiny – Out-Law.com

Last year the Competition and Markets Authority (CMA) launched a consultation on the impact of “eco-friendly” claims in the promotion of goods and services. The call for information closed at the end of the year. Although the full outcome of the review is unlikely to be known until summer 2021, it seems likely that eco claims will be the subject of increased regulation and scrutiny to avoid misleading consumers increasingly influenced by environmental credentials.

Consumers are increasingly seeking out eco-friendly goods for which they are willing to pay a premium. With that premium comes the temptation by the manufacturer or retailer to ‘greenwash’ the product with overstated and exaggerated claims that the product is environmentally friendly. Greenwashing, involving the provision of misleading, vague or false claims disseminated to promote an environmentally responsible public image is not a new phenomenon, but awareness and scrutiny of such claims is growing and likely to lead to increased regulation and, in turn, liability for those tempted to promote goods with claims that cannot be substantiated.

The CMA investigation was prompted by the UK government’s focus on achieving net zero carbon emissions and transition to a low carbon economy. CMA chief executive Andrea Coscelli said: “Our role is to make sure that consumers can trust the claims they see on products for sale and don’t fork out extra for items falsely presented as eco-friendly.”

The CMA does not just have misleading claims in its sights. It is also examining the omission of information. Failure
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