The ‘E‘ of ESG: CMA’s new guidance sharpens expectations on environmental claims about supply chains

In our recent blog series, we highlighted that greenwashing is facing increasing scrutiny from regulators in the EU, US, and UK. Recent UK developments illustrate this focus: first, in January 2026, the UK Competition and Markets Authority (CMA) launched new practical guidance on supply chain liability in relation to environmental claims; and second, in February 2026, the UK Advertising Standards Authority (ASA) upheld complaints against two companies that distribute infant care products, for making misleading environmental claims. 

ASA upholds complaints on misleading environmental claims 

In February 2026, the ASA, which regulates advertising and works alongside the CMA on consumer protection matters, upheld complaints against two companies (here and here) that distribute infant care products for making misleading environmental claims. In both cases, the ASA found that absolute claims such as “sustainable”, “eco” and “biodegradable” were not adequately substantiated and lacked evidence, based on the full life cycle of the products. They both therefore gave a misleading impression of the products’ environmental impact. Likewise, the ASA confirmed that the basis for comparative claims such as “kinder to the planet” and “better for our world” must be clear in the advertising itself.

New CMA guidance on green claims throughout the supply chain 

Meanwhile, in January 2026, the CMA released new guidance entitled “Making green claims: Getting it right, across the supply chain”. This guidance builds on existing Green Claims Code sector-specific guidance and is aimed at all levels in a supply chain (e.g. raw material suppliers, manufacturers, brands, distributors, retailers, and online marketplaces). Notably, the new guidance explains how the CMA considers consumer law applies when multiple businesses contribute to a product's environmental messaging and provides further clarity on the relative responsibilities of those businesses in relation to environmental claims across supply chains. 

The CMA broadly defines "making" an environmental claim and emphasises that every business involved in making, relaying, or relying on an environmental claim is expected to take steps to ensure those claims are accurate and not misleading. Significantly, the guidance highlights the need for all businesses across supply chains to ensure that environmental claims are robust, transparent, and verifiable. For instance, “upstream” entities (raw material suppliers, component manufacturers, and manufacturers of the ‘as sold’ branded goods) should ensure their environmental claims are well-founded and verifiable, and should keep retailers informed of relevant changes; while “downstream” entities (retailers, marketplaces, distributors) are advised to not assume that environmental claims provided by others are compliant - but instead to have internal processes in place to satisfy themselves regarding the accuracy of such claims. 

Implications for businesses

The new guidance provides illustrative examples of misleading environmental claims, and the entities within the supply chain, against which the CMA is most likely to prioritise enforcement action. Overall, the CMA will target the party that originated the misleading claim or is best placed to correct it. For example, if a sports brand supplies trainers labelled “100% recycled” when only the sole is recycled, and refuses to correct the description, the CMA would prioritise taking action against the brand, as it is better positioned to remedy the issue. Conversely, if a supermarket places a product with only 10% organic content in its environmental range, despite presenting that range as containing a minimum of 60% organic content, the CMA would focus on the retailer, as it created the misleading categorisation and is best placed to correct it. The guidance also provides a practical operational checklist for all supply chain participants. For example, it suggests that:

• Retailers should obtain and regularly check evidence, particularly for new suppliers, instead of relying on upstream assurances. They should have contractual arrangements and processes in place to reassess if claims are correct.
• Brands selling through third parties are expected to substantiate and update their claims and provide retailers with appropriate assurance.
• Suppliers and manufacturers are advised to maintain records, operate internal verification and transparency systems, and employ alternative assurance (such as independent verification) where confidential information limits direct disclosure.

With this guidance, the CMA has signalled that it has heightened expectations for businesses across the supply chain making environmental claims (i.e. not only those that interact directly with consumers). It also serves as a reminder to businesses of the importance of green claims governance. 

An Evolving Regulatory Landscape

The CMA’s new guidance sits alongside an existing framework of guidance and indicates a maturing approach by the CMA and ASA to the tackling of environmental claims. It supplements the CMA’s Green Claims Code (published in September 2021), which established six foundational principles on environmental claims:

• claims must be truthful and accurate;
• claims must be clear and unambiguous;
• claims must not omit or hide important relevant information;
• comparisons must be fair and meaningful;
• claims must consider the full life cycle of the product or service; and
• claims must be substantiated. 

This framework has also been complemented by sector-specific guidance from the CMA (e.g., for fashion retail and green heating) and guidance on environmental sustainability agreements. Meanwhile, the ASA’s guidance on misleading environmental claims was last updated in October 2025. 

Further, the CMA’s powers to investigate and enforce misleading green claims (and other consumer law breaches) have been significantly strengthened since the introduction (in April 2025) of the Digital Markets, Competition and Consumers Act 2024. The CMA can now investigate and enforce breaches independently, assessing the individual infringement based on its general approach to consumer protection, and has a toolkit that includes significant penalties. You can read more about the CMA’s new enforcement powers and priorities in our blog posts on our Risk & Compliance blog page.

Meanwhile, NGOs are increasingly steering their greenwashing claims towards the UK National Contact Point (NCP), which enables broader claims to be made beyond those based on misleading statements. For example, NCP claims also typically include allegations concerning a company’s environmental impact. In March alone, the UK NCP agreed to continue investigating two specific greenwashing complaints (including complaints against British Airways and Drax).

Taken together, these developments show that there continues to be a real focus on green claims, and highlight the growing litigation and enforcement risks for businesses making environmental claims about their products and business operations – including across their supply chains. 

This blog is part of ‘The ‘E’ of ESG’ blog series. Click here to explore more blogs of our series. You can read more about our Environment, Social and Governance offering here.