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Fashion and the Green Claims Code brought into focus by open letter from the CMA.

Yesterday, the CMA published an open letter to businesses in the fashion sector, and three retailers gave undertakings to reform the way they make sustainable claims. In doing so, the CMA reiterated the aim of its Green Claims Code: - to give businesses better tools to make accurate and truthful environmental claims about their products. 

We consider how the Code could be further developed in the future for fashion businesses and suggest the action they should take now. 

  • How should the CMA build on its current Green Claims Code for the fashion sector?

Further explanation of how the Code should be applied in practice would be extremely helpful for fashion businesses, to reduce any ambiguity and encourage better compliance. As is done via these undertakings, the CMA should provide businesses with specific examples and scenarios as to how green claims should be approached so that “best practice” is clear. For example, it should be very clear to businesses when they should and should not use certain descriptors, and the scientific evidence that is required to substantiate this each time. Other helpful guidance would be to provide businesses with examples of how such information should be communicated to consumers; (i.e: on product labels, signage, etc). 

  • What steps should fashion businesses take?

Fashion businesses need to able to explain and evidence their environmental claims to a regulator such as the CMA. Retailers and producers of clothes should implement robust testing and recording processes to ensure that all claims can be substantiated to avoid misleading consumers. In terms of the claims themselves, pseudo-scientific or confusing claims should be avoided. The entire life cycle of a fashion product must be considered when a fashion business evaluates and then advertises its environmental impact. For example, if a product has been manufactured using a partially sustainable process for one element, the impact of this should not be exaggerated. Brands must think as carefully about what they do not say as what they do so in order to avoid giving a partial impression. 

Absolute claims (e.g: “100% natural” or “re-cycled”) should be used with caution unless they can be fully evidenced, as absolute claims require an even higher level of substantiation from a legal perspective. Businesses should also audit their supply chains to ensure that subcontractors and suppliers are compliant – and should take active steps to remove those that aren’t or engage in remedial measures with them. In terms of keeping up to date with the law, regular training sessions should be run for those making decisions about green advertising claims and legal advice should be sought on running compliant sustainability promotions and products. 

  • Do the commitments made by these brands set a benchmark for the sector?

As this letter is specifically aimed at fashion retailers (and the wider supply chain), the expectations from the CMA are clear and so yes, they should act as a benchmark for the fashion sector in the UK. These undertakings reduce the ambiguity in terms of the expectations for the use of words such as “eco”, "responsible” or “sustainable.” As the undertakings make clear, these terms need to be explained to the consumer, but importantly, this goes further than just the requirement to substantiate, as these undertakings show how it should be done (e.g: including percentages of recycled fibres). As mentioned above, additional practical guidance would be helpful to fashion businesses so that they understand their obligations and don’t inadvertently breach the code despite their best efforts. Despite the fact that this letter does act as a benchmark, the brands that have been targeted (i.e: ASOS, Boohoo and George) do not have particularly strong sustainability credentials and / or greenwashing track records, so it remains to be seen whether the rest of the industry will feel that this letter too applies to them.

  • Is the CMA likely to target additional sectors?

Sectors that are by their nature, less sustainable, and that manufacture products – are likely to be targeted. As well as fashion, sectors such as transport, technology, food and drink and agriculture are all likely to face scrutiny, as well as the more obvious ones such as energy.

Whilst arising out of an investigation, it is generally speaking a positive move for the fashion sector. It demonstrates that the sector is grappling with the challenges it faces and wants to meet them proactively and through engagement with the regulators, which will surely stand the sector in good stead.  It will be very interesting to see whether this prompts proactive engagement from other sectors, similarly keen to keep in the regulators’ good books. 

Following the CMA’s investigation, three fashion retailers have given undertakings whereby they have agreed to change their practices to address the CMA’s concerns about certain environmental claims and commercial practices.

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