Boohoo, Asos and Asda face greenwashing investigations from UK regulator

Fast fashion giants Asos and Boohoo, plus supermarket Asda, are to have their sustainability claims scrutinised by the UK’s Competition and Markets Authority (CMA) as it tests new approaches to clamp down on misleading statements.

Boohoo, Asos and Asda face greenwashing investigations from UK regulator

All three firms are required to regularly provide reports to the CMA on their compliance with these commitments.

The CMA confirmed earlier this year that it would target the fashion sector for its first major investigation on whether environmental claims complied with its Green Claims Code.

A sweep of corporate websites by the CMA last year found that four in ten are providing misleading information on environmental issuesA similar study from the Changing Markets Foundation found that 60% of the environmental claims of large British and European fashion brands could be classed as “unsubstantiated” and “misleading”. Hence why the CMA began with fashion.

Late last week, the CMA confirmed that it had completed its initial review of marketing and labelling in the fashion sector and that it has chosen Asos, Boohoo and George at Asda as the first brands to face more in-depth investigations. Statements made by the brands will be checked against the Green Claims Code’s 13 checklist points, which cover issues including exaggeration of positive impact and omitting important information.

The CMA has voiced concerns that the way in which some fashion retailers name collections of items which are supposedly more sustainable is too vague – like ‘Ready for the Future’ at Boohoo. It is also assessing whether retailers are, for example, stating that these collections contain recycled fabrics or fabrics certified using a sustainability scheme, when the proportion is a small minority.

This is just the start of our work in this sector and all fashion companies should take note: look at your own practices and make sure they are in line with the law,” said the CMA’s interim chief executive Sarah Cardell.

“We’ll be scrutinising green claims from Asos, Boohoo and George at Asda to see if they stack up. Should we find these companies are using misleading eco claims, we won’t hesitate to take enforcement action – through the courts if necessary.”

Other than taking a brand or brands to court, the CMA has the power to implore companies to draw up plans to change the way they operate and report on progress in this field. It may, however, decide that no further action is needed.

Asos, Boohoo and Asda have stated to media representatives that they will co-operate with the CMA’s investigation. Asda has also stated that it would “welcome further work by the CMA to ensure the sustainability claims made by the fashion industry as a whole are robust and clear.”

A study conducted by Retail Week earlier this year found that many shoppers are falling for the greenwashing being used in the fashion sector. The 1,000 people surveyed were asked to name the most sustainable retailers and brands, and eyebrows were raised over the fact that Primark, H&M and Amazon were in the top five.

Government intervention?

The CMA has been working on the Green Claims Code for around two years, having first launched the checklist points in the second half of 2021. Earlier this year, it wrote to the Government arguing that the Department for Business, Energy and Industrial Strategy (BEIS) could do more to combat greenwashing and encourage business collaboration on environmental topics.

The CMA is recommending that the Government introduces legislative definitions for some of the sustainability terms that are most commonly used on products and packaging – but which consumers find the most confusing. Such terms include ‘carbon-neutral’, ‘recycled’, ‘recyclable’, ‘biodegradable’ and ‘compostable’.

Ministers have not yet indicated plans to draw up these decisions – and with the race on for the next Conservative Party Leader and Prime Minister, it’s doubtful that an update will be forthcoming in the coming weeks.

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