UK competition authority warns firms not to rely on suppliers’ green assurances

CMA publishes guidance telling companies to reconsider trading with firms unable or unwilling to verify claims.

The UK’s competition authority has warned companies that they will be held liable for inaccurate green claims, even if the errors are in third-party data or assurances from suppliers. 

Firms must do their own due diligence on environmental claims, the Competition & Markets Authority (CMA) said in guidance published on Thursday, and take full responsibility for the information underpinning them.   

“We appreciate that it can sometimes be difficult to obtain the relevant information from other businesses,” acknowledged the CMA, but added: “It is important that businesses making environmental claims take the necessary steps to ensure that claims are accurate and non-misleading.” 

The watchdog gave the example of a contractual arrangement in which suppliers give firms assurances about their green practices.  

“If you are unable to obtain the information needed to satisfy yourself of the accuracy of a claim, you should consider whether you should make the claim differently, in a way you can verify,” it cautioned.  

The CMA added that if a supplier will not or cannot verify a claim, “then you may need to consider your trading relationship with that business for that product, given the legal risk this may open up for you.”  

Its guidance, which builds on the CMA’s 2021 Green Claims Code, also stressed that the intent behind a misleading claim was irrelevant.   

“[T]he law is clear that intention of any wrongdoing is not relevant and an ‘innocent’ or unwitting breach is still a breach of the law”, the CMA wrote.  

Although it added that efforts to comply with the law may be considered a mitigating factor when assessing penalties. 

The CMA’s guidance also provided real world examples of how its guidelines can be applied, along with a set of checklists for retailers, brands and manufacturers and suppliers.