The UK Competition and Markets Authority (CMA) is recommending the government amend the law on providing environmental information to consumers with the aim of making sustainable shopping easier. After a public consultation, the CMA has proposed several changes for government consideration — for example, setting standard definitions for potentially misleading terms like “carbon neutral”’, “sustainable”, and “recyclable”. Ultimately, the proposal intends to prevent businesses from using misleading greenwashing terms and help consumers make informed decisions around sustainability.
Making sustainable shopping easier for consumers
Sustainable products are becoming increasingly popular in the UK. In fact, British shoppers are willing to spend as much as £3,654 more every year for sustainable household goods and services — in addition to their existing outgoings of about £30,000 annually. As such, the risk of greenwashing becomes a growing concern; in a bid to appeal to environmentally-conscious consumers, some companies are slapping eco-friendly claims onto their products that aren’t actually backed by evidence. According to the CMA, setting standard definitions of common green terms will help consumers more easily compare products and make informed purchases. Implementing standard definitions would also line up nicely with the CMA’s existing Green Claims Code, which offers guidelines to businesses about how they can communicate honestly and transparently about their eco-friendly status to consumers.
Seeing through greenwashing
Despite being an attempt to win customers, the act of greenwashing can end up backfiring on businesses. In fact, a fifth of UK shoppers have stopped purchasing a product within the past year because they believe the brand’s responsible for greenwashing. Over half of shoppers “keep an eye” on the practices adopted by the businesses they use. Additionally, two-thirds of UK shoppers also want large businesses to publish an audited environmental impact statement every year. McDonald’s in the UK, for example, say they’re committed to a “zero-waste-to-landfill” target, yet, upon closer examination, this turns out to be a greenwashing technique. Their recycling target is merely 50% of their total waste, while they send the remaining 50% to an incineration plant (aka a “waste-to-energy” plant). Incineration plants are far from good for the environment and are certainly not zero-waste. Burning waste releases toxins and harmful greenhouse gas emissions — just the same as burning fossil fuels does. It also creates toxic “bottom ash” (which accounts for roughly 17% of all incinerated material), which is notoriously hazardous and underregulated.
As a result of growing consumer awareness surrounding greenwashing practices and a desire to live more sustainably, people are increasingly looking to buy from honest and genuinely eco-friendly businesses. Alcohol and its environmental footprint, in particular, is one area of concern for consumers. In response, small distillers are working to minimise their carbon footprint by implementing eco-forward initiatives. For example, some distilleries run “plant-a-tree” clubs, which involves planting a tree every time a customer signs up, ultimately offsetting personal and business-generated carbon emissions. Tree planting works to support wider global reforestation efforts, tackle the climate crisis, and prevent temperatures from rising above 1.5C.
Working toward sustainability goals
The CMA’s advice comes after the Secretary of State for Business, Energy, and Industrial Strategy (BEIS) made a formal request to the CMA in July 2021: it asked for advice on ways competition and consumer law frameworks can be improved in line with overarching sustainability goals (including net-zero carbon emissions). In May, just a few months prior, the CMA publicised its views on common types of false or misleading sustainable claims made about products that potentially break the law, and announced they’re working on issuing guidance to businesses on how to handle eco-friendly claims.
How sustainable is the UK’s fashion retail industry?
Then, shortly after in January this year, the CMA began its first-ever review of potentially misleading environmental claims across the fashion retail industry. Since UK consumers spend a whopping $54 billion every year on clothing, footwear, and accessories, the sheer size of the industry makes such a review much-needed — not to mention the sector also being responsible for between 2%-8% of carbon emissions globally. The CMA is currently looking at products and services making environmental claims (such as an item being “sustainable”, “better for the environment” or made from recyclable materials), and whether or not consumers are being misled.
The review will also ultimately reveal whether businesses are adhering to consumer protection law or not. If the CMA finds a business guilty of dishonest greenwashing practices, they’ll respond with “appropriate action”. Moreover, the CMA also currently says they’re unconvinced of claims calling competition law an obstacle to businesses adopting sustainable practices. For instance, companies can form partnerships and share resources, materials, and expertise designed to minimise their industry’s environmental footprint without breaching competition rules. Nevertheless, the CMA says businesses will better be able to adopt eco-friendly practices without needing to worry about breaking the law if more clarity about competition law is provided.
CMA launches a sustainability taskforce
The CMA has also launched a Sustainability Task Force to head up their work in the eco-friendly arena, with the ultimate target of supporting the UK’s goal of slashing carbon emissions by 78% by 2035. The Sustainability Task Force will comprise employees from all over the CMA, as well as experts from outside organisations and industries. The Task Force will converse with the government, industries, and partner organisations, as well as create formal guidelines. The Task Force will also regularly assess the potential need for legislative change, especially following on from new market developments.
“We want it to be as easy as possible for businesses and, ultimately, shoppers to make choices which are better for the environment”, said Sarah Cardell, General Counsel at the CMA. “That’s why we plan to shine a light on what businesses can and can’t do under current competition and consumer laws, as well as advising the government on changes that will help people shop more sustainably. Our new Task Force will take a leading role in helping to make sure the UK’s economy not only serves the interests of consumers but also delivers on its environmental responsibilities.”
