Understanding the new Green Claims Code

The Competition and Markets Authority (CMA) has outlined six key points to check environmental claims as part of a new Green Claims Code. This is in a bid to improve the accuracy of environmental reporting and clamp down on greenwashing as businesses come under harsher scrutiny for false sustainability claims.  

A new set of guidelines to ensure that your business’s green claims stack up 

Greenwashing and green hushing have become recognised terms in the business space, but widespread understanding of these terms has led to a greater number of businesses getting called out for unintentionally reporting inaccurate sustainability information about their operations.   
 
Confusion around the language related to climate issues and the requirements for making sustainability claims has caused an increase in greenwashing, with a 2021 report from the CMA finding 40 per cent of firms globally had made green claims considered to be misleading. However, the CMA has released a new set of guidelines designed to improve clarity when it comes to sustainability claims.  

What’s in the Green Claims Code?  

The CMA’s Green Claims Code outlines succinct descriptors necessary for sustainability claims to maintain transparency and avoid the greenwashing label. The six key points include:  

• 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 

What does this mean for my business?  

The Green Claims Code gives organisations accurate steer on how to approach environmental reporting, but they also provide external bodies with a clear checklist which can be used to precisely identify greenwashed claims. By following the guidelines outlined by the CMA, businesses can avoid making false claims and being criticised for it.  
 
An effective way to substantiate your business’ sustainability claims is to support them with up-to-date, relevant, and credible evidence. The claim and its supporting evidence should be clearly related to a business’ product or service and avoid commenting on broader, unrelated environmental impacts, such as the holistic positive impact of a material that your business is not directly responsible for.   
 
A common error made by businesses which leads to greenwashing is making unsubstantiated general claims such as eco-friendly, green, or sustainable when these statements are not reflective of the brand, product, or service as a whole. For example, if a brand were to claim eco-friendliness for using a recyclable material for one of their products, but they freight that material from distant countries and are a net polluter, this would be greenwashing.  
 
Finally, misleading claims are direct examples of greenwashing which go against the CMA’s Green Claims Code. Any claims which exaggerate positive climate impacts, for example by highlighting unrelated impacts as a direct outcome of certain operations, are false. Any features, impacts or benefits that are standard or legal requirements of a product or service can’t be claimed as an environmental benefit since they are enforceable by law and aren’t necessarily conscious decisions made by a business.  

Do you need support with your environmental reporting? 

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If you would like support and advice on avoiding greenwashing and delivering accurate and honest environmental reporting, speak to one of our expert advisors today at www.greeneconomy.co.uk