• Skip to primary navigation
  • Skip to main content
  • Skip to footer
The Evolution of ESG RegulationThe Evolution of ESG RegulationThe Evolution of ESG Regulation

CUBE global

  • Products
        • RegPlatform product overviewOur enterprise product, providing regulatory intelligence for large, global financial institutions looking to tackle complex compliance.
        • RegAssure product overviewOur highly intuitive, seamless compliance product, that grows with your small or medium sized business.
        • CUBE's technology
  • Solutions
        • PrivacyGlobal governance for data privacy regulations, the world over
        • RecordsHolistic oversight of ever-growing regulations for records
        • CybersecurityAutomated workflows for up to date, relevant data on cyber
        • Technology riskEffective policies and controls to mitigate technology risk
        • Financial crime and AMLWatertight audit trails to show risk-based rationale
        • View all solutions
  • Resources
        • Resource hubLifting the lid on financial services, compliance, and regulation
        • Read

        • Case Studies
        • Blog posts
        • Reports
        • RegNews
        • Brochures
        • Find

        • Compliance Corner
        • Compliance Confessions
        • ESG Conference
        • CUBE’s regulation game
        • Listen

        • Videos
        • Webinars
        • Podcasts
  • Partners
        • Advisory and consulting partnersEnhance your regulatory compliance offering with the entire suite of CUBE regulatory data.
        • Integration partnersCompliance is complex enough without over-complicated integration procedures.
        • Technology partnersAdd value to existing customer applications with a unified window into regulatory intelligence.
        • Partners overview
  • About us
        • About usThe story of who we are, how we got here and why we’re exceptionally proud of what we do
        • TeamThe visionaries and leaders powering CUBE’s success
        • NewsThe latest news from CUBE
        • CareersOur movement to transform regulatory data into regulatory intelligence
        • ContactWant to know more? Get in touch
  • Request a demo
Customer login
Home » Resources » CMA’s Green Claims Code to prevent greenwashing
Green trees in the forest represent sustainability as the CMA tries to stop greenwashing

September 29, 2021 | Ali Abbas

Estimated reading time: 3 minutes

CMA’s Green Claims Code to prevent greenwashing


The Competition and Markets Authority has published its Green Claims Code, in a bid to ensure that businesses are “honest with their customers about their green credentials”.

The guidance, which tackles the emerging rise of greenwashing, has been opportunely published in the run up to COP26.

On publishing the Code, the CMA highlighted that a recent “global sweep” of randomly selected firms found that as many as 40% of “green” or sustainable claims made online were actually misleading, therefore acting in contravention of several laws and regulations, not least the Consumer Protection from Unfair Trading Regulations.

What does the Green Claims Code say?

The Green Claims Code applies to all businesses (products and services within all sectors) and will cover the gamut of industry – from advertisements and product labelling to product names.

The Code establishes six key principles:

  1. Claims must be truthful and accurate
  2. Claims must be clear and unambiguous
  3. Claims must not omit or hide important relevant information
  4. Comparisons must be fair and meaningful
  5. Claims must consider the full lifecycle of the product or service
  6. Claims must be substantiated

When will the Code apply?

The CMA has given firms until January 2022 to embed and comply with the newly published Code.

CUBE comment

‘Greenwashing’ is hugely topical and an increasing concern for consumers, especially given the current climate in the run up to COP26. Consumers and investors are eager to know that their ‘green’ products and investments actually do what they say on the tin. The new Green Claims Code should be a concern for firms who were looking to profit from the rise of sustainable investments, without actually embedding environmental, social or governance (ESG) or sustainability within their product offerings.

From a stronger armed standpoint, greenwashing should also be a concern for firms given the messaging coming from global regulators. As some of you may remember, it was not long ago that the FCA said that many of the investment fund applications it was seeing were “poor quality and falling below expectations”. In a Dear Chair letter it found that many ‘green’ or ‘sustainable’ claims did not stand up to scrutiny.

Similarly, the Australian Securities & Investments Commission (ASIC) recently announced that it had “intervened” in a yet to be named energy company’s initial public offering over concerns about its ‘net zero’ statements. ASIC said that “where there are no reasonable grounds to underpin a ‘net zero’ statement that is predictive in nature, the disclosure may be misleading”. The regulator’s action resulted in the company discontinuing its ‘net zero’ messaging, with ASIC adding that it will “take regulatory action where warranted”.

The CMA has said that in its review of misleading claims under the Green Claims Code it will initially prioritise sectors such as fashion, travel, and fast-moving consumer goods. However, it points out that it will swiftly explore any sector in which it finds significant concerns about greenwashing. Given the recent regulatory activity from FCA, ASIC and rumours that Germany’s BaFIN is working with US regulators to take punitive action against a large German bank for greenwashing (which it is pursuing through the lens of fraud), it is almost a dead cert that financial services will be high on the CMA’s list.

The CMA is just the latest body to take decisive action to affirm that greenwashing won’t wash. It also adds to the growing number of ESG-related regulations, rules, and guidance that firms will have to comply with as we move into 2022.

Related resources
View all resources
Discover the FCA's new Buy Now Pay Later (BNPL) regulation
Blogs

Get ready for Buy Now, Pay Later regulation

AI regulations
Blogs

AI solutions – a strong ally under global review

Recent US and UK crypto regulation developments
Blogs

Taming the crypto wild west: the US and UK strengthen regulation

How to comply with the Consumer Duty
Blogs

How to comply with the Consumer Duty?


Want CUBE updates and latest industry news sent straight to your inbox?

Footer

Add CUBE logo here

  • Products
    • Partners
    • Solutions
  • Resource hub
    • Blogs
    • Reports
    • Brochures
    • Compliance Corner
    • Webinars
    • Podcasts
    • Videos
  • Behind CUBE
    • About us
    • Meet the team
    • Careers
    • News
    • Contact us
  • The legal bits
    • Privacy policy
    • Cookie policy
    • Terms of use
    • Accessibility
Follow us:
  • LinkedIn
  • Twitter
  • YouTube

© 2023 CUBE Content Governance Global Limited

  • English
  • US

envelope

Want CUBE updates and latest industry news sent straight to your inbox?

Sign up to our Newsletter here