The CMA is going after fashion brands responsible for “greenwashing” with a plan to “name and shame” the worst offenders.
The fashion sector made up about a quarter of complaints received by the Competition and Markets Authority over false or misleading environmental claims, called greenwashing, according to research by law firm RPC.
The CMA is, “proactively investigating specific industries – this includes the fashion sector with the CMA recently announcing its plan to ‘name and shame’ the worst greenwashing offenders amongst fast fashion brands,” said Ciara Cullen, a Partner in RPC’s Retail & Consumer group.
The CMA’s new enforcement powers could see offending businesses fined up to 10% of global annual turnover.
The fashion and packaging industries topped the list of greenwashing complaints received by the CMA following the introduction of its Green Claims Code last year, accounting for more than half from September 2021 to April 2022.
The Code aims to stop companies making false or misleading claims about their or their products’ environmental credentials.
“Greenwashing” complaints about fashion brands could for example relate to incorrect or deceptive claims about using recycled materials in clothing or manufacturing clothing in a sustainable manner.
“With the CMA being granted additional enforcement powers, this will significantly increase the risk for businesses who get environmental claims wrong,” Cullen said.
“With the US-style class actions becoming more prevalent in the UK and Europe, businesses will not only have to contend with greater regulatory scrutiny but could also find themselves having to ultimately pay out significant sums to disgruntled customers.”