Tamara Davison
Tamara Davison is a journalist who specializes in sustainability and the environment. Reporting from around the world, she's seen firsthand the direct impact waste is having on coastal communities and our oceans. As a diver trained in ecological monitoring, the changes Tamara has seen in marine habitats inspired her to action. She's previously written for The Guardian, The Independent and the Evening Standard. She's also produced environmental documentaries for EuroNews.
In 2020, the UK’s Competition and Markets Authority (CMA) found that 40% of websites around the world made misleading green claims.
Greenwashing has become a serious concern over the last few years, as a growing number of companies falsely claim to be more sustainable than they actually are.
While greenwashing can be accidental in some cases, it can sometimes be a deliberate attempt by businesses to cut corners, save costs, and avoid environmental commitments.
To counter this, the CMA introduced its flagship Green Claims Code in September 2021 to provide more clarity to businesses about environmental claims in the UK.
If your brand or business operates in the UK, there’s no way around it — you need to understand how the Green Claims Code impacts your operations. Here’s everything you need to know.
What’s on this page?
01 | What is the Green Claims Code?
02 | The Green Claims Code principles
03 | How does the Green Claims Code work?
04 | Which businesses are affected by the Green Claims Code?
05 | How to make your business compliant with the Green Claims Code?
06 | Green Claims Code penalties
07 | Summary
08 | FAQs
What is the Green Claims Code?
The Green Claims Code is a set of principles that brands have to adhere to when making sustainability claims in the United Kingdom.
It's one of a sweeping number of anti-greenwashing initiatives that authorities have implemented worldwide to support and enhance legitimate corporate environmental action.
First implemented in 2021, the Green Claims Code applies to all advertising, marketing, and product claims targeting UK consumers, and also impacts non-UK-based businesses operating in this market.
While not necessarily a piece of regulation, the code aims to counter greenwashing by helping brands understand how to avoid making misleading claims as outlined by consumer law. It’s a list of guidance that basically breaks down exactly the CMA interpretation of greenwashing in consumer laws.
It also encourages businesses to invest in environmentally friendly practices and communicate their sustainability credentials clearly. Finally, it’s also designed to protect consumers from making purchases that may not stack up in their environmental credentials.
Brands that make ‘green claims’ (showing products or services that benefit the environment) must ensure their messaging aligns with the code.
Though not a law itself, failure to follow the UK’s Green Claims Code can lead to fines and penalties for breaches against wider UK consumer laws, negatively impacting business operations and consumer perception.
The Green Claims Code principles
According to the UK Government, the six green principles that businesses have to follow are:
- Claims must be truthful and accurate
- Claims must be clear and unambiguous
- Claims must not omit or hide important relevant information
- Comparisons must be fair and meaningful
- Claims must consider the full life cycle of the product or service
- Claims must be substantiated
How does the Green Claims Code work?
The Green Claims Code guides businesses in presenting and communicating their environmental credentials based on the six principles above.
Brands are expected to be aware of the Green Claims Code and comply with it through their operations and marketing.
The best way to do this is by backing up environmental messaging with data and have relevant facts, figures, and supporting evidence for this.
If your business’s claims don’t align with the code’s principles, you’ll need to make necessary changes to your messaging and operations.
As it provides guidance on complying with UK consumer protection law, brands may face penalties or court if they fail to do so.
The CMA, Trading Standards Services, and the Advertising Standards Authority (ASA) can investigate organizations that appear to be conducting greenwashing activities in breach of the Green Claims Code.
Failure to comply with the Green Claims Code can also impact investor confidence and negatively impact consumer support.
Several leading businesses have been impacted by the Green Claims Code in various ways. For example, while Asda, ASOS, and Boohoo didn’t seem to face fines following a 2022 CMA investigation, the brands did agree to file regular reports and clarify their future sustainability claims more clearly.
Which businesses are affected by the Green Claims Code?
The Green Claims Code applies to all retailers, distributors, manufacturers, and wholesalers with UK-facing operations that make environmental claims.
While it specifically targets brands with consumer-facing products and services, it can also apply to B2B (business-to-business) operations.
It doesn’t matter how big your company is, either. As long as your customers and clients are UK-based, you must comply with the Green Claims Code.
It’s also worth pointing out that similar guidelines are now in effect in the United States, where the Federal Trade Commission’s Green Guides offer businesses information on sustainability messaging. The European Union (EU) also recently implemented a Green Claims Directive in Europe, outlining similar goals among companies working within the EU.
How to make your business compliant with the Green Claims Code?
Some of the six principles may sound confusingly similar, but they all have specific goals that help brands avoid greenwashing. Here are our tips for ensuring your business aligns with all the Green Claims Code principles:
1. Are your claims truthful and accurate?
Make sure that any claims about your environmental impact don’t mislead consumers. So, try to avoid exaggerating or overstating information that may give shoppers the wrong impression.
An example would be claiming that your product is recyclable, when only certain parts of it can actually be repurposed.
To ensure you’re adhering to this, it's best to first get to know your products. For example, conduct a lifecycle assessment (LCA) and collect all the relevant data to determine your business's complete environmental impact so you can make accurate claims.
2. Are your claims clear and unambiguous?
You also need to avoid any messaging that isn’t entirely clear to consumers — such as terms like ‘green’ or ‘planet friendly.’
Any information that may seem unclear needs to be backed up with supporting information that clearly explains your position.
What’s more, a 2023 YouGov poll found that 60% of global respondents were skeptical about brands’ sustainability claims. So, refrain from using unsupported language to build trust among shoppers.
3. Are you sharing all the important, relevant information?
Share information about your product lifecycle — from sourcing materials to post-consumer waste — to paint a complete picture of your sustainability initiatives.
To support this, consider featuring environmental certifications where possible, such as the Forest Stewardship Council (FSC) certification on sustainably sourced cardboard products.
What’s more, recycling information should be clearly featured based on the types of materials you use to empower customers to do their part.
4. Are your comparisons fair and meaningful?
Make sure you only conduct comparisons against similar products and brands to help customers feel informed about their options.
For instance, if you manufacture beauty products, offer comparative sustainability information based on data collected from the wider cosmetics industry.
You also need to clearly explain how any comparisons are calculated and determined, as well as ensure they’re up-to-date to demonstrate fairness and accuracy.
5. Have you considered the full lifecycle of your products and services?
Failing to factor in the entire lifecycle puts brands at risk of being investigated for misleading claims.
If a company says it has reduced its carbon emissions by 20%, but failed to factor logistics into this calculation, then that doesn’t paint a clear enough picture.
We’re not saying you need to include every piece of information about your product’s lifecycle in the packet, but you must have a clear strategy for sharing that information.
Setting up a sustainability page with all the relevant information is a good place to start.
6. Are your claims substantiated?
One of the best ways to ensure compliance with the Green Claims Code is to back everything up with evidence.
This means regularly monitoring your sustainability data, ensuring your claims match the facts and figures, and communicating that with customers.
Consider working with an independent third party to add a further layer of verification. For instance, CleanHub uses advanced track-and-trace technology so brands can share their plastic collection data online in real time.
This means that claims about being plastic-negative, for example, are backed up and verified by an external partner, building trust.
Green Claims Code penalties
While there aren’t specific penalties for breaching the Green Claims Code, businesses can be penalized against wider UK consumer laws.
According to the Financial Times, companies could face fines of up to 10% of their global turnover if they breach consumer law, which also factors in greenwashing.
This means some of the world’s biggest companies could be ordered to pay millions of pounds if they are found to be greenwashing. Furthermore, individuals may face fines of up to £300,000 for similar breaches.
The UK government also recently passed the Digital Markets, Competition, and Consumer (DMCC) bill, which may give the CMA even more power to impose fines by the end of 2024 — suggesting we may see further policing in the future.
Alongside penalties, brands may face lengthy investigations, such as Unilever, which has faced legal action for greenwashing since late 2023.
On a more granular level, Green Claims Code failures can also deter customers who increasingly care about the environment and negatively impact your sales.
Summary
With more and more greenwashing incidents coming to light, it's never been more important for brands to truly show their commitment to the planet.
The bottom line is that the Green Claims Code is a crucial piece of the UK’s corporate sustainability puzzle.
And, it’s going to become even more important in the coming years as authorities hold brands accountable for doing their part to save the planet.
Looking ahead, we’re hopeful this will lead to more collaboration between brands, regulators, and consumers to embrace genuine sustainability practices.
Want to showcase your brand’s commitment to the environment? CleanHub can help. Connect with our experts to learn more about the technology and reporting that can help you comply with the Green Claims Code.
FAQs
What is the green claims code?
The UK’s Green Claims Code is a set of principles designed to help businesses operating in the UK market avoid greenwashing. Brands can be held accountable by UK regulators if they fail to comply with the guidelines.
What are the main points of the Green Claims Directive?
The Green Claims Directive is actually the EU-facing version of sustainability guidance. Similar to the UK’s Green Claims Code, its goal is to ensure brands’ environmental claims are genuine.
What are the different types of green claims?
Green claims relate to any messaging that promotes your brand or business as doing something good for the planet, such as data about reduced emissions, recyclability, or waste-free initiatives. A Green Claims checklist for businesses can be found here.
