ASA and CMA crack down on greenwashing

The UK Competition and Markets Authority (CMA) and Advertising Standards Authority (ASA) have recently published updated guidance on green claims, highlighting a continued focus on concerns that consumers are being prevented from making informed decisions about ‘greener’ products and services.

CMA’s report on consumer protection in the green heating and insulation sector

On 31 May 2023, the CMA published its findings and recommendations on consumer protection in the green heating and insulation sector, following consultation. The sector is identified as one that is critical to the success of the UK’s net zero goal, and where consumer confidence in claims made by providers is necessary to facilitate an effective shift away from more carbon-intensive offerings. 

One of the three key themes of the report is potentially unfair business practices in the sector. The CMA recognises that consumer confidence and engagement is needed to drive effective competition and greater innovation in the sector. However, it considers that misleading claims, including greenwashing, as well as limited transparency of pricing information, risk undermining consumers’ ability to make informed decisions about the products and services on offer. The other key themes include people’s experience of buying green heating and insulation products, and the landscape of standards bodies overseeing quality and consumer protection standards for member businesses.

 Three practices, in particular, are flagged as “key concerns” in the CMA’s report:

• Cost-saving or energy efficiency claims (e.g. “save up to X% on your energy bills”). The CMA notes that claims must be transparent and backed up by evidence, in order to support consumers in making informed decisions. Claims must also be representative of real-world experience – for example, claims promising benefits ‘up to’ a certain level should reflect pertinent factors such as property type, product design and typical consumer usage.
• Mis-stating or overstating the environmental benefits of a product – for example, claims presenting ‘hydrogen-ready’ boilers, which may give the incorrect impression that use of hydrogen/natural gas blend fuel is imminent (rather than pending Government decision), or that standard gas boilers would not be able to use a hydrogen blend.
• Limited and inconsistent provision of pricing information. As well as concerns over limited provision of upfront pricing information, the CMA notes (linked to point 1 above), that some businesses exclude key information – such as likely ongoing running costs, again impeding consumers’ ability to make informed decisions.

The CMA has already published a consumer-focused guide to buying such products and has developed a set of good practice principles for standards bodies. It intends to publish further sector-specific guidance to help businesses operating in this sector and has also indicated that it will conduct a sector-wide compliance review, to identify potential misleading and greenwashing claims. Similar compliance reviews in other sectors have led to investigation into claims made by specific retailers (see our previous blog here), following the CMA’s earlier publication of the Green Claims Code in 2021 (see our previous blog here).

ASA updates its green claims guidance

On 23 June 2023, the ASA published updated green claims guidance. The guidance now reflects the ASA’s recent decisions in this area (including those discussed here) and sets out more specific examples of what the ASA thinks are features that make a claim or type of advert more or less likely to mislead.

Following on from this, on 27 July, the ASA published a round-up of its guidance on how businesses can promote their environmental initiatives without misleading consumers by omission. Key to this, as highlighted in the CMA’s report on the heating and insulation sector, is providing evidence to support claims, and ensuring that claims are put into sufficient context to enable consumers to understand the basis on which they are made.