With climate change in the hearts and minds of people all over the world, now more than ever, consumers are conscious of making environmentally friendly decisions. The increased availability of eco-friendly and sustainable goods and services (or so-called ‘green’ products) on the UK market provide a persuasive appeal to consumers who are conscious of their role in preventing climate change. “Greenwashing” – a marketing strategy which makes false and misleading claims that products or services are environmentally friendly – is a problem which is becoming ever more prevalent.
The launch of the Competition and Markets Authority’s (CMA) formal investigation into whether ASOS, Boohoo and Asda’s eco-friendly and sustainability claims constitutes as “greenwashing” may come as a surprise to some, but is a stark warning to businesses that greenwashing could potentially be a widespread issue which is likely to alarm consumers and knock their confidence in brands that they once trusted. Businesses making misleading ‘green’ claims in advertising is a serious matter and can result in reputational damage, potentially causing consumers to shop elsewhere.
The CMA’s initial statement released announcing the investigation set out its aim was to “get to the bottom of whether the firms’ green claims are misleading customers.” The CMA’s ongoing review into greenwashing began following concerns that information about products has not been made readily available to consumers, so they are unable to make an informed choice about whether a product is environmentally friendly or not.
Whilst there are no current laws in the UK that specifically address greenwashing, if a claim or advertisement is considered to be misleading – which could include the use of trademarks if these contribute to the overall impression of an advertisement, businesses risk facing investigations either by the Advertising Standards Agency (the UK’s self-regulating advertising agency) or the CMA. Businesses should be aware that any investigation will not only look at individual claims, but the adverts will be looked at in their entirety including words, images and trademarks used.
Specifically in relation to trademarks, businesses should be aware that any marks used in their own advertisements and attributable to their business name, brand name, names of their products or services, logos, or slogans is likely to provide information about their brand or product to consumers. Understanding the way in which trademarks and branding will be considered by consumers is critical to businesses avoiding claims that their trademarks mislead consumers. For businesses using trademarks which symbolize environmental claims such as eco-friendly and sustainability, it is even more crucial that such claims can be substantiated with accurate evidence to avoid claims or investigations that these trademarks mislead consumers.
To avoid claims in relation to “greenwashing”, businesses should ensure that any use of green trademarks are a true reflection on the strategy and product offering, therefore assessing marketing strategy is crucial. If products are only considered green under certain conditions, such conditions must be prominent enough for the consumer to understand them. Even aesthetic presentations of products such as the color of the packaging, pictures or logos could mislead consumers, therefore businesses must be aware of how visual presentations affect consumer perceptions. When preparing advertising campaigns, companies should follow the CMA guidance on consumer marketing, including its Green Claims Code Guidance, and adhere to the UK advertising rules and guidance published on the ASA website, along with the ASA’s Bespoke Copy Service for non-broadcast advertising.
It is suspected that the outcome of the CMA’s investigations will result in increased regulation and guidance around what information and evidence is required in order for businesses to claim that a product or service is sustainable or eco-friendly. Increased regulation will put more pressure on businesses to be more transparent about their environmental claims, which could result in a reduced economic market for such products if some businesses cannot satisfy the requirements for claiming a product is ‘green’. However, more transparency will ensure that customers are able to make a more educated decision when buying products, whilst ensuring that their trust is maintained in the business. It is essential that businesses follow the necessary guidance to prevent any legal disputes and customer complaints about greenwashing.
Written by Charlotte Cassells, IP and commercial solicitor at Shakespeare Martineau
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