Definition 1
Greenwashing means misleading consumers, authorities or others by implying or making a claim, which cannot be verified, that an entity’s products, services, activities, policies, business practices, processes or brands:
(a) have a positive effect on the environment;
(b) have no adverse environmental impact; or
(c) are less damaging to the environment than a previous version of the product, similar products or competing products, services, activities, policies, business practices, processes or brands.
Drafting notes and guidance
Greenwashing involves creating a misleading impression (deliberately or otherwise) that a company or its products or services are more sustainable or ‘green’ than they are.
How are greenwashing claims made?
They can be effected through marketing, advertising, branding, packaging and labels as well as through public statements, public information or actions. They can also be affected by using vague or non-specific terminology.
What makes a claim misleading?
Whether a statement or action is ‘misleading’ can be determined by reference to:
- Consumer protection law including The Digital Markets, Competition and Consumers Act 2024 and, in particular, the Competition and Markets Authority (CMA)’s Green Claims Code and guidance on ‘Making Environmental Claims on Goods and Services’. See also the CMA’s open letter to firms in the fashion sector outlining general principles to ensure environmental claims are not misleading;
- the Advertising Codes, which are mandatory rules for advertisers produced by the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice and enforced by the Advertising Standards Agency (ASA);
- ASA Advertising Guidance on Misleading Environmental claims and Social Responsibility; and
- Environmental legislation such as the EU’s Energy Labelling Regulations (2017/1369) and additional delegated regulations on labelling and standard product information.
CMA’s Green Claims Code
The CMA’s Green Claims code is based on the following principles:
- 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.
- Claims must be substantiated.
ASA’s Advertising Code rules
The key Advertising Code rules concerning greenwashing are similar to the CMA’s principles.