Make sure you are whiter than white when it comes to claims of 'greenwashing' - Joanna Fulton & Anna O'Donnell

In January, plant-milk brand Oatly was ordered by the Advertising Standards Authority not to repeat misleading adverts and social media posts.

The ads claimed that “Oatly generates 73% less CO₂ vs. milk” - but this was only accurate when comparing with Oatly Barista Edition and not all Oatly products.

Also last month, Pepsi had an Advertising Standards Authority (ASA) complaint against it upheld.

A bus shelter advert for its Lipton Ice Tea product included the words “Deliciously Refreshing, 100% Recycled*” and shots of the bottles with a recycling logo and text stating “I’m 100% recycled plastic”.

The asterisk led to text at the bottom of the poster stating the cap and label were excluded, but the ASA found that owing to the small size of the text and its placement, the additional text could be overlooked - and the overall impression was that the whole bottle was made from recycled materials.

The dictionary definition of ‘greenwashing’ is attempting “to make people believe that your company is doing more to protect the environment than it really is”.

January 2022 saw the Competition and Markets Authority (CMA) launch its first sector compliance review under its new ‘Green Claims Code’, launched in September 2021.

The initial spotlight is on fashion retail. This sector accounts for approximately £54 billion of spending in the UK annually - and is estimated to be responsible for between 2% and 8% of global carbon emissions.

Other sectors potentially up for review include travel and transport, and fast-moving consumer goods.

The CMA has warned it will take action against any non-compliant business even while reviews are ongoing.

The Green Claims Code applies throughout the supply chain, including to manufacturers, wholesalers, distributors and retailers, and to both goods and services during the whole lifecycle of a product.

It is based on six key principles aimed at ensuring sustainability. Claims must:

be truthful and accurate – broad terms such as “green” and “eco-friendly” may be deemed unclear and risk creating a more favourable impression than is justified; be clear and unambiguous – when using terms such as “biodegradable” and “recyclable”, it must be made clear whether this refers to the product or the packaging, and which parts; not omit or hide important relevant information – QR codes could be used to give more detailed information; be fair and meaningful – comparative claims should be capable of being substantiated by transparent and accurate evidence that consumers can verify, and comparators should meet the same needs or be for the same purpose; consider the full lifecycle of the product or service – if it is stated that a product has “33% lower carbon impact”, this must be based on the entire lifecycle, including transportation etc; be substantiated – when using the terms “cleanest” or “best” this must be backed up with evidence.

The CMA will not just be looking at consumer-facing activities - because its remit extends to business-to-business sales where the principles should also be applied.

Greenwashing is not the only misleading practice that the CMA is focusing on. On 9th February it launched another campaign “The Online Rip-Off Tip-Off”, targeting misleading online practices that could result in shoppers being ripped off.

It’s clear that the CMA and ASA will take action on greenwashing. That’s why it’s vital all businesses take a fresh look at their advertising, marketing, packaging and labelling to ensure they are genuinely compliant.

Joanna Fulton is a Partner with Burness Paull. This article was co-written by Anna O'Donnell, who is a Trainee Solicitor with the firm.