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Retailers Warn Stringent Crackdown on Greenwashing Could Stifle Sustainability Efforts

Consumer confidence has fallen to a record low as households cut back on leisure spending to save money amid soaring inflation.

The British Retail Consortium has sounded a note of caution, warning that the Competition and Markets Authority’s (CMA) stringent approach towards greenwashing could inadvertently hamper retailers’ sustainability endeavours.

As the CMA intensifies its scrutiny of companies suspected of embellishing their environmental commitments to appeal to eco-conscious consumers and ESG investors, Helen Dickinson, Chief Executive of the consortium, expressed concern over potential repercussions. While acknowledging the importance of transparency in business practices, Dickinson highlighted the risk that businesses might retract from showcasing their sustainability achievements if faced with harsh regulatory sanctions. She emphasized the need for clear guidelines to mitigate such outcomes, asserting, “We shouldn’t let that stand in the way.”

Dickinson stressed the imperative for the regulator to ensure clarity regarding expectations from businesses and for retailers to uphold the integrity of their sustainability claims.

The CMA’s recent focus on eco-friendly and sustainability assertions made by fashion retailers Asos, Boohoo Group, and George at Asda underscores its commitment to combatting greenwashing. The regulator’s scrutiny extends to the fast-moving consumer goods sector, encompassing products where eco-friendly claims may influence consumer choices.

In December, the CMA initiated an investigation into Unilever, the manufacturer of household staples such as Marmite and Hellmann’s mayonnaise, amid concerns over potentially misleading “green” claims on essential household items.

A spokeswoman for the CMA reiterated the authority’s commitment to guiding businesses in aligning with legal responsibilities when making environmental assertions. The creation of the green claims code, comprising detailed principles and case studies, aims to facilitate accurate and transparent communication of businesses’ environmental actions. The CMA remains engaged with businesses as it advances its efforts to ensure authenticity in environmental claims.

The delicate balance between fostering genuine sustainability progress and deterring deceptive marketing practices underscores the complexity of regulatory oversight in the realm of environmental commitments. As stakeholders navigate this landscape, clarity and collaboration between regulators and businesses emerge as essential elements in fostering meaningful environmental stewardship while combatting greenwashing.

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Retailers Warn Stringent Crackdown on Greenwashing Could Stifle Sustainability Efforts