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Greenwashing: Does it represent a moral hazard? Welcoming the Green Claims Code

Danny Lillington looks at the recent introduction of a Green Claims Code and asks is it now time to take greenwashing as seriously as we do other legal misdemeanours?

Organisations branding themselves as environmentally-friendly when they’re not, is an issue the Advertising Standards Authority (ASA) has become increasingly embroiled in over recent years. There have been numerous cases of consumers being misled around levels of emissions and recycling of waste, for example.

While the efforts of the ASA are laudable, it’s fair to say that the size of the stick they’ve been able to wield in cases of ‘greenwashing’ has been limited to requiring the withdrawal of misleading claims and campaigns halted.

However, the introduction of a new code is set to up the ante, with misleading sustainability and environmental claims now falling under the scrutiny of the UK Competition and Markets Authority (CMA).

The Green Claims Code was published by the CMA in September 2021, laying out a set of principles. It states:

· Claims must be truthful and accurate

· Claims must be clear and unambiguous

· Claims must not omit or hide important information

· Comparisons must be fair and meaningful

· Claims must consider the full life cycle of the product or service

· Claims must be substantiated

So, what does this add, you may wonder?

Firstly, while no new regulations have been introduced in this regard, the CMA has made it clear that from this year onwards businesses and organisations falling foul of the code “will receive their attention” within the context of already existing consumer protection law.

What they are now saying is that the CMA itself and bodies such as Trading Standards Services will bring court proceedings in connection with greenwashing. It has made clear that, in its view, the principles of the code must be followed in order to comply with the law and that “businesses may be required to pay redress to any consumers harmed.”

Clearly the tone is being set. We all need to stop seeing greenwashing as just marketing that’s a bit misleading, but as a calculated lack of legal compliance.

Should we now even go as far to say greenwashing is a sign of moral hazard? If an organisation is willing to mislead over environmental matters, what else might it be willing to mislead around? What other questionable practices could they be following? Perhaps we need to ask, are organisations that fall foul of the Green Claims Code ones we’re prepared to partner with or transact with?

I believe the Green Claims Code is an important step in acknowledging the seriousness of the environmental risks and challenges we now face. Let’s welcome it, spread the news to others and take breaches of its principles as seriously as we do other legal misdemeanors.

What’s your view? Does greenwashing represent moral hazard? Visit our Linkedin page and comment.

For further information and guidance on The Green Claims Code click below.



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