Greenwatch: greenwashing in the spotlight - regulatory risks across the supply chain 

On 22 January 2026, the CMA published new guidance for retailers, manufacturers and distributors on making green claims across the supply chain, adding to its existing guidance bank (including the Green Claims Code (CMA146)).

What you need to know

• The UK's Digital Markets, Competition and Consumers Act 2024 (DMCC Act) strengthened regulatory enforcement of consumer protection law. It granted the Competition and Markets Authority (CMA) the ability to impose fines of up to 10% of a company's global turnover for breaches, including for false or misleading claims.
• Greenwashing is an area of focus for the CMA and regulators around the world. Businesses are making an increasing number of environmental and sustainability-related claims and consumers have an increasing interest in environmental factors.
• The new guidance confirms that misleading green claims remain on the CMA's radar as a priority for enforcement. It reiterates that the potential risk applies to all businesses in the supply chain.

What you need to do

• Ensure any green or environmental claims are clear and substantiated by credible evidence, including from your supply chain, where relevant.
• Avoid making vague or misleading environmental claims.
• Review marketing materials and ensure compliance with the CMA's published Green Claims Code and other regulatory guidance, including Advertising Standards Authority (ASA) rulings.

What are the relevant rules?

Greenwashing refers to the practice of businesses making misleading or false environmental claims.

There is no specific prohibition against "greenwashing" under UK consumer protection law but a statement with greenwashing effect could fall within several categories of prohibited conduct, depending on the form it takes.

For example, the DMCC Act restates prohibitions of certain commercial practices which are deemed as unfair to consumers in all circumstances. There are currently 32 of these "banned practices", including displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation. Using an accreditation symbol from an environmental organisation without approval would fall within this prohibition.

Additionally, the Act prohibits misleading acts or omissions, including the supply of misleading information (for example, in adverts and consumer marketing or in product or brand information), where the act or omission is likely to cause an average consumer to take a different decision than would have been the case absent the misleading act or omission.

Traders should not:

• give consumers information which is objectively false;
• provide misleading information, including information which, although true, is presented in a misleading way and is likely to cause the average consumer to take a different decision; or
• present claims or information in a manner which is misleading.

The CMA's Green Claims Code, published in 2021, provides key guidance to businesses on the application of provisions relating to unfair commercial practices to environmental claims. Although the Green Claims Code pre-dates the DMCC Act, the relevant legal provisions on which it relies are restated in the Act. The Code therefore continues to apply.

The Green Claims Code sets out six key principles:

• Claims must be truthful and accurate.
• Claims must be clear and unambiguous.
• Claims must not omit or hide important information.
• Claims must be fair and meaningful.
• Claims must consider the full life cycle of the product or service.
• Claims must be substantiated .

What enforcement powers does the CMA have?

The DMCC Act grants the CMA new powers to directly enforce consumer law without having to bring court proceedings (see our April 2025 briefing). Under the DMCC Act, the CMA now has the power to:

• issue infringement notices (i.e. decisions) setting out why the CMA considers that conduct or terms breach consumer law;
• impose directions on businesses, including directions to provide redress to affected consumers, and accept undertakings; and
• impose fines (of up to 10% of global turnover on companies and up to £300,000 on individuals).

The CMA released general guidance setting out its approach to exercising its direct enforcement powers in CMA 200. It set out its priorities for enforcement in its April 2025 approach document. This did not expressly refer to misleading green claims, but did refer to "providing information to consumers that is objectively false".

On 22 January 2026, the CMA released new guidance on "Making green claims: Getting it right, across the supply chain". In this guidance, the CMA provided further insight into the factors it will consider when deciding on its enforcement approach (including by reference to its '4Ps' framework (pace, proportionality, predictability and process). These factors include: (i) the strategic significance of intervention, (ii) the likelihood of a successful outcome, (iii) the expected direct and indirect impact for consumers, and (iv) which businesses in the supply chain are legally responsible for the alleged infringement. In relation to green claims specifically, the CMA notes that it will consider "which is the appropriate business or businesses to investigate, for example, one or more of the retailer, brand, manufacturer or other business in the supply chain".

The new guidance confirms that misleading green claims remain on the CMA's radar as a priority for enforcement. It reiterates that the potential risk applies to all businesses in the supply chain.

What about the role of the ASA?

False environmental claims used in consumer adverts may also fall foul of the ASA's prohibitions against misleading or false environmental claims. The ASA enforces two key advertising codes: the CAP Code, for non-broadcast advertising, and the BCAP code, for broadcast advertising. Each provides guidance on how to avoid misleading consumers through environmental claims. Both codes include specific rules relating to environmental claims:

• The basis of environmental claims must be clear. Unqualified claims could mislead if they omit material information.
• The meaning of all terms used in marketing communications must be clear to consumers.
• Absolute claims must be supported by a high level of substantiation. Comparative claims such as "greener" or "friendlier" can be justified, for example, if the advertised product provides a total environmental benefit over that of the marketer's previous product or competitor products and the basis of the comparison is clear.
• Marketers must base environmental claims on the full life cycle of the advertised product, unless the marketing communication states otherwise, and must make clear the limits of the life cycle.
• Marketers must not suggest that their claims are universally accepted if a significant division of informed or scientific opinion exists.
• If a product has never had a demonstrably adverse effect on the environment, marketing communications must not imply that the formulation has changed to improve the product in the way claimed.
• Marketing communications must not mislead consumers about the environmental benefit that a product offers.

In 2025, the ASA issued more than 10 rulings against adverts found to contain misleading green claims.

What types of claims have been caught?

In 2023, the CMA launched an investigation into three retail fashion companies (Asos, Boohoo and George at Asda) in relation to their environmental claims. The CMA secured undertakings from these retailers in 2024. It also issued letters to a further 17 brands. Following the investigation the CMA published specific guidance on greenwashing claims for retail fashion brands (see our September 2024 update).

Other CMA investigations focused on environmental claims to date have been in sectors such as fast moving consumer goods (FMCG) (launched in 2023) and heating and insulation (launched in September 2022). Following its investigation into heating and insulation, the CMA published further guidance in July 2024, setting out compliance advice for marketing green heating and insulation products. The CMA noted that it had found evidence of several business practices which could potentially mislead consumers.

As noted above, the ASA also plays an active role in the enforcement landscape and has recently made a number of high profile rulings against companies who made unsubstantiated sustainability claims. Airlines, retailers and energy companies are amongst those that have been targeted. On 2 December 2025, the ASA published a Snapshot Report on the action it has taken monitoring travel agents. The ASA reported that two thirds of the environmental claims it had identified were non-compliant.

Enforcement examples:

In the table below we have illustrated how the principles in the Green Claims Code have been applied using examples from ASA enforcement actions and undertakings secured by the CMA.

What should businesses do to mitigate the risks of greenwashing?

When considering the claims you want to make, businesses should:

• Substantiate each environmental claim with credible and up to date evidence.
• Ensure that claims are sufficiently clear and precise (for example, as regards the scope of the claim).
• Avoid making vague claims such as "environmentally friendly" or "sustainable".
• Regularly review marketing materials and product or brand information.
• Ensure legal and marketing teams have regular training on the Green Claims Code (including updated CMA guidance) and ASA guidance.
• Review your internal policies, controls and governance to ensure that consumer-facing communications comply with consumer protection law.

What is the implication for supply chains?

The CMA's recent guidance confirms that businesses across the supply chain can be liable for misleading claims. Where a business holds the evidence substantiating a claim, the CMA expects it to proactively share that evidence with others in the supply chain who rely on the claim. Where a claim is found to be misleading, more than one business in the supply chain may be found to be responsible. But the CMA will consider which business' actions have the greatest potential to cause widespread harm, as well as whether the business concerned has taken steps to seek to minimise the risks that they publish misleading claims. For example:

• Where a retailer has relied on the information provided by a brand, and has taken steps (such as those listed below) to verify the claim, the CMA notes it is more likely to prioritise action against the brand.
• Where a retailer provides a number of branded products as part of an "Environmental range", but has not sought sufficient confirmation from the brand that its product meets the specification of the range, the CMA is more likely to focus on the actions of the retailer.

The guidance provides new, role‑specific, checklists for retailers, brands and manufacturers, designed to clarify the CMA's expectations across the supply chain when making or relying on environmental claims. These are summarised below:

Want to know more?

• CMA publishes guidance on environmental claims in the fashion sector, 24 September 2024, for a summary of CMA guidance on environmental claims.
• Board Priorities in 2025: Greenwashing, 16 January 2025, for a summary of governance risks associated with greenwashing claims.
• New era for consumer enforcement in the UK, 7 April 2025, for a summary of the consumer law changes introduced by the DMCC Act.
• How widespread is greenwashing in the UK, 17 July 2025, for an overview of a report by Which? into the prevalence of misleading green claims in the UK