Greenwashing is when a business promotes itself as being eco-friendly but doesn’t do much to actually help the environment. It can be seen as deceitful, encouraging environmentally conscious consumers to buy something they believe to be good for the planet when in reality it might not be.
It’s a potentially damaging move that could lead to both reputational harm and legal penalties.
In the business world where being ‘green’ is ever more important to consumers, companies may be tempted to highlight their eco-friendly efforts. But, how can they ensure their claims are genuine and safe from accusations of greenwashing?
Addressing greenwashing in the UK: the current landscape
The UK is fighting greenwashing mainly by using the power of shoppers and their choices. There are laws to stop ads that aren’t true or are confusing. This fight got stronger when the Green Claims Code was introduced by the Competition and Markets Authority (CMA) in September 2021.
Understanding the Green Claims Code
The Green Claims Code provides guidelines mainly rooted in consumer law. It outlines the following principles:
• Claims should be honest and accurate
• Claims should be clear and unambiguous
• Significant information must not be hidden or omitted
• Comparisons should be fair and meaningful
• The entire life cycle of a product/service must be considered when making claims
• Claims must be substantiated
While the Green Claims Code acts as guidance rather than enforceable law, bodies like the CMA, Trading Standards Services, and the Advertising Standards Authority can take action against businesses that make false or misleading claims infringing consumer protection law.
The Advertising Standards Authority (ASA) recently banned an advert for German airline Lufthansa due to its misleading about the environmental impact of flying. Similarly, the CMA has appealed to the UK Government to enforce stricter definitions of terms like ‘carbon neutral’, ‘recycled’ and ‘recyclable’.
Promoting a greener supply chain: A commercial perspective
Greenwashing has increasingly come under the spotlight, and in turn a lot of businesses are starting to add ‘green’ rules into their contracts. Some suppliers are pledging to undertake eco-friendly measures such as monitoring their carbon footprint, minimising waste, and controlling pollution, and are typically required to maintain records as evidence of these efforts. If suppliers don’t keep these promises, they could be made to pay fees, pay for damages, or even have their contract ended.
As solicitors, our role in commercial contracts becomes crucial in this context. We can meticulously draft and review your contracts to include such environmental commitments and their corresponding consequences if breached. This not only supports your business’s sustainability goals but also ensures you have legal recourse if suppliers fail to meet their green obligations.
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