As sustainability becomes a key focus for businesses and consumers, the risk of greenwashing has grown. Greenwashing is a form of advertising that uses deceptive green marketing to persuade the public that an organisation’s products or policies are environmentally friendly when in reality, they may not be.
Previously, the Advertising Standards Agency (ASA) had the power to ban misleading advertisements. From the 2nd of April 2025, the Competition and Marketing Authority (CMA) have been given the power to impose fines on any businesses making misleading environmental claims. The new fines can be up to 10% of the company’s global turnover, or up to £300,000, whichever is greater.
All references to Environmental, Social and Governance (ESG) sustainability topics in a product or service must be fair, clear and not misleading. Examples of misleading criteria include labelling items as ‘green’, ‘sustainable’ and ‘ecofriendly’. Using this terminology without the data to back it up can lead to the advert being banned and fines imposed. Additional information about the green claim must be easily accessible for consumers. The customer should not have to take further action to access the information, such as following a link or QR code. Content descriptions cannot be ambiguous; for example, partially recycled items cannot just be called ‘recycled’, it is now a requirement to state the exact percentage of recycled content.
Many businesses think they can make green claims, as they offset their emissions with carbon credits; however, these carbon offsetting schemes are unregulated, meaning they may not be making any positive impact on the environment. It is expected that we will see litigation against those companies who have mis-sold carbon offsetting, and the companies making green claims from these schemes.
The new greenwashing legislation marks an important step towards greener consumerism by creating a more informed consumer pool. Businesses must prioritise authenticity and transparency in their marketing efforts to foster trust between themselves and customers. This step is crucial in ensuring sustainability efforts are both genuine and impactful.
