A surge in businesses promoting green claims is leading to environmentally-conscious consumers being ripped off by some greenwashing companies
A Competition and Markets Authority (CMA) investigation published this week found that people buying ‘green home’ heating technologies – like solar panels and heat pumps – are not always treated fairly by businesses.
The CMA found examples of potentially misleading claims by some businesses. This could lead to people buying heating products that are not as green as they’re claimed to be or could put people off buying environmentally-friendly heating products altogether.
George Lusty, Senior Director for Consumer Protection at the CMA, said:
‘We want people to have confidence when they buy green heating technologies and home insulation. It’s essential they get what they paid for and that energy efficiency and sustainability claims are fair and accurate.’
Confusing, inconsistent and inaccurate claims
This is not an isolated problem. Although more of us are looking to buy sustainable products and services, companies don’t always make green choices easy – eco claims can be confusing, inconsistent or outright misleading.
Many people don’t trust companies to be honest about how sustainable they really are – with good reason. A global review of online green claims – led by the CMA and published in 2021 – found that 40% were either misleading, exaggerated or unsubstantiated, and could potentially qualify as unfair commercial practices.
Greater regulatory focus on misleading green claims
Since then, greenwashing has become a more important part of the regulators’ agenda. Earlier this year, the CMA launched an investigation into the £130 billion household essentials market after finding 91% of all dishwashing items and 100% of all toilet products were marketed as green or environmentally friendly.
Sarah Cardell, Chief Executive of the CMA, said:
‘As more people than ever try to do their bit to help protect the environment, we’re concerned many shoppers are being misled and potentially even paying a premium for products that aren’t what they seem, especially at a time when the cost of living continues to rise.’
The investigation will cover food and drink, personal care products – like shampoo and toothpaste – and cleaning products.
This comes after the regulator launched an investigation into the environmental claims made by well-known fashion brands – Asos, Boohoo and George at Asda. This includes examining claims that branding clothing ranges as sustainable, better for the environment or recyclable.
But the regulator has little power to sanction companies. It can only write to firms telling them to stop what they’re doing.
More regulatory powers to take action on misleading claims
Legally, goods must not be misrepresented but to date the CMA has had little power to do anything about misleading claims. This is set to change. The new Digital Markets, Competition and Consumer Bill, if enforced, will give powers to the regulator to impose heavy fines for misleading shoppers. These new regulations fall short in terms of allowing consumers to be paid damages (or compensation) when the law is broken.
A role for collective action lawsuits
Worldwide, campaigners are increasingly filing climate-related lawsuits aimed at misleading corporate green claims. This week, a proposed class action lawsuit was launched in the US against Delta Air Lines following advertising claims it made about the airline being carbon-neutral.
Group claims offer a route to consumers getting money back from rule-breaking businesses. Private group litigation claims can be brought either by one individual representing others (though people can ‘opt out’ of these claims if they want to) or by a number of individuals coming together to take the claim as a single group (known as ‘opt in’).
Such claims, however, face stiff resistance. Earlier this month, the UK Supreme Court ruled that it was too late for more than 27,000 Nigerian claimants to sue Shell over a 2011 oil spill that continues to impact the coastal area where they live.
Advice to people buying green heating and insulation products
The CMA has published a consumer guide to help people buy green heating and insulation products. It gives information about what to consider when buying and summarises your rights under consumer protection law.
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