Author: Dr. Angelika Hellweger 17 August 2022
Dr. Angelika Hellweger of financial crime specialists Rahman Ravelli comments on the crackdown on products being misrepresented as “eco-friendly” in the fashion industry.
The U.K.’s Competition And Markets Authority (“CMA”) launched a Green Claims Code in autumn 2021 to crack down on companies that are inaccurately and unethically claiming that their products have “green credentials” without having proof that their full supply chain process is completely eco-friendly.
According to recent reports, the fashion industry is responsible for 10% of global carbon emissions. In addition, 85% of all finished textile goods end up in landfills each year.
With this said, consumers are becoming more interested in buying from sustainable brands which has subsequently motivated companies to promote their product's 'green credentials' to encourage sales.
However, entire lines of clothing within stores are being labelled as “sustainable”, made of “recycled materials” or “reducing waste,” when in reality, there is no proof that the end-to-end process from manufacture to delivery, packaging, and sale is actually good for the environment.
It is said that clothes, footwear, and accessories are being marketed as eco-friendly with language that seems too vague and misleading.
As such, it doesn’t come as any surprise that CMA is looking closely at fashion retailers and probing into potentially misleading environmental claims made by fashion brands such as Asos Plc, Boohoo Group Plc, and George (Asda), over greenwashing concerns.
The goal is to ensure that companies substantiate their claims with evidence and not omit or hide important relevant information that relates to the full lifecycle of the product.
It can be expected that other sectors including travel, hospitality, and consumer goods will come under the scrutiny of the CMA as well with the high possibility of more future enforcement activities.
Furthermore, other regulators in the UK (and worldwide) have already announced that they will step up their enforcement efforts when it comes to greenwashing claims.
Angelika is a specialist in international, high-level economic crime investigations and large-scale commercial disputes. She has widely-recognised expertise in representing corporates and conglomerates in Europe, the Middle East, Africa and United States.