Fast-fashion greenwashing and the power of trademarks
The UK's Competition and Markets Authority (CMA) has launched an investigation into three major fast-fashion brands over alleged misleading sustainability claims.
The competition watchdog will examine claims made by ASOS, Boohoo and George at Asda about their fashion products, including clothing, footwear and accessories.
The move forms part of its ongoing investigation into potential greenwashing—a form of deceptive marketing to persuade the public that an organisation's products, aims and policies are environmentally friendly.
It also comes amid concerns around the way retailers’ products are being marketed to customers as ‘eco-friendly’, and is likely to alert consumers that greenwashing may potentially be widespread and harm consumer confidence in household brands that many of us trust.
Making false misleading claims in advertising is a serious matter and results in negative publicity for the businesses involved, as well as reputational damage and having difficulties engaging consumers.
The power of trademarks
Many businesses with a branding strategy focused on sustainability or being environmentally friendly will often have their brand name and trademarks designed to promote their ‘green’ approach and service or product.
Trademarks are a powerful tool in the marketplace to enable a business to promote its environmental strategy and/or products, particularly if they choose to incorporate common green features to advertise to consumers that their business is focused on sustainability.
But businesses will need to ensure any ‘green’ trademarks used are a true reflection on the strategy, product or service, to avoid any claims of being misleading. Therefore, having the right marketing strategy in place is crucial.
Consumer confidence
Ideally consumers are drawn to engaging with their content—particularly online and through social media—and then buy their products. If these businesses are found to be greenwashing, consumer confidence in the brand could be drastically reduced.
Consumers are becoming more and more aware of their social responsibility towards saving the environment and put their trust in companies claiming that their goods are ‘green’, ‘carbon neutral’ and ‘eco-friendly’. Advertising and IP has a direct impact on how we all behave and make choices about buying ‘green’ products.
The advertising of environmentally friendly products in the UK must be clear and substantiated with evidence of the claims that the product is green.
There is now an increased availability of so-called green products on the UK market, but it appears from initial comments made by the CMA that in this investigation, the appropriate information has not been made clear to consumers so they can make an informed choice about whether a product is ‘green’.
The UK advertising regulator released comprehensive guidance on businesses advertising environmentally friendly goods in December 2021.
This guidance, among other points, set out that any environmental claims made in adverts must be based on the full lifecycle of the product; any limits of this cycle be made clear; and communications must be prepared with a sense of responsibility to consumers and society.
The CMA’s investigations involve stress-testing claims made by these businesses to ensure that they do not mislead the average consumer, and that they are reasonably well informed before investing in a product they believe is environmentally friendly. Many businesses will likely be reviewing their own marketing campaigns in response to the CMA’s investigation.
The ASA is self-regulated, so it is up to businesses to ensure that their advertising campaigns are compliant with the standards. It also relies on businesses and consumers informing them of advertisements in circulation which do not follow the advertising rules.
An investigation conducted by the CMA into well-known businesses, which many consumers trust, for misleading consumers on environmental claims will undoubtedly see an increase in complaints to the ASA over businesses misleading consumers that their products are ‘green’.
Greater transparency
Businesses and IP practitioners should consider their overall branding strategy and assess how their trademarks will be considered by consumers, particularly if they are incorporating ‘green’ trademarks when their strategy is not entirely focused on sustainability. They should also avoid misusing trademarks or affiliations that are associated with products being environmentally friendly.
To avoid these issues, it is critical for businesses to review any marketing campaigns or product descriptions before they become available to consumers. They should consider whether the average consumer—a person reasonably well informed, reasonably observant and circumspect— could objectively assess the environmental claims being made, and whether such claims are true.
Businesses should also follow the CMA guidance on consumer marketing, including the Green Claims Code guidance. They should also adhere to the UK advertising rules and guidance published on the ASA website and use the authority’s bespoke copy service for non-broadcast advertising.
Increased guidance and following criteria on what satisfies a product being ‘green’ ensures that consumers are protected and can make informed choices.
There will also be increased pressure on businesses to be more transparent over their environmental claims, which could result in a shrinkage of the green market as businesses may not be able to satisfy any future guidance or requirements for claiming a product is truly green.
Kerry Russell is legal director at Shakespeare Martineau.
Charlotte Cassells is a commercial and IP solicitor at Shakespeare Martineau.
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