What is the Green Claims Code and how can it affect your business?

What is the Green Claims Code?

The Competition and Markets Authority (CMA) developed the Green Claims Code to give businesses a framework for checking their environmental claims are genuinely green. It’s a checklist and extensive guidelines designed to help businesses feel more confident about their green claims. It also means that consumers can begin to trust that the claims made by businesses are as good as they seem. In other words, it hopes to tackle greenwashing!

Defining a ‘green claim’

A green claim is a claim that shows how a product, service, brand or business is less harmful to the environment, or even benefits it. These claims are used by businesses in all industries to market themselves and reach consumers who are conscious of sustainability when buying. Whether these claims are genuine has been an increasingly difficult thing to determine – brands want to appeal to changing audience habits, and so they invest a lot of money into their eco-marketing, rather than actually improving their business practices.

The appetite for products and services that minimise harm to the environment is increasing. Consumers across all generations are stating that they would be happy to pay more for sustainable products than they would have done two years ago.

Greenwashing and misleading green claims

Greenwashing is the act of causing people to believe that your company, product or service is doing more to protect the environment than it really is. A global review by the CMA found that 40% of online green claims could be misleading consumers.

Whether intentional or not, misleading greenwashing could include having vague claims about being ‘eco-friendly’ without explaining why you’re using the term, and hiding critical information from consumers about certain aspects of your business to make you appear more eco. It could also include claims that your business is less damaging to the environment than your competitors’ goods or services.

Imagine you’re selling stacks of party napkins and you’re proudly talking about how they’re fully compostable. But you’ve not made it clear on the packaging whether it is compostable at home, or only compostable in specific industrial settings. Or, it could be compostable but still release harmful chemicals or plastics into the ground. This is considered a misleading claim, as you would need to explicitly say ‘compostable in industrial settings’ instead of only ‘compostable.’

This applies to service businesses, too. You could claim that you’re 100% carbon-neutral, but without offering the public evidence to back it up, or making it clear that you’re offsetting via a dodgy scheme that does more harm than good, it’s considered a misleading claim.

This study highlights that only true, genuine green claims positively impact consumer behaviour – and greenwashing harms the brand reputation. Not only does greenwashing damage your reputation in the eyes of consumers, but it puts you at risk of breaking the law. If a business doesn’t comply with consumer protection law, the CMA, Advertising Standards Authority, and other bodies can take action against your business for misleading consumers.

Making sure every piece of green marketing you’re putting out there complies with the law is in your business’ best interest – for ethical, legal, and even profitable reasons.

Check your claims against the green claims checklist

If you’re now worried that your claims are inaccurate or a victim of greenwashing, the GCC includes a checklist for you to easily check whether your claims are genuine.

When making a green claim, a business should be able to say ‘yes’ to statements such as:

• There is up-to-date, credible evidence to show that the green claim is true
• The claim doesn’t exaggerate its positive environmental impact, or contain anything untrue – whether clearly stated or implied
• The claim doesn’t miss out or hide information about the environmental impact that people need to make informed choices

For a full breakdown of the official 13-point checklist, check the UK government’s website here or watch the video below.