GREENWASHING

British businesses to face big penalties for greenwashing claims

By our News Team | 2023

Soon-to-be-passed laws will put corporate greenwashers ‘in the crosshairs of the regulators’, legal experts warn.

Governments and regulatory bodies around the world are continuing to crack down on false environmental claims being made by businesses. This comes in the wake of ever-increasing pressure from consumers, climate activists and environmental organisations.

In Britain, for example, the upcoming Digital Markets, Competition and Consumer Bill will see big corporates facing the threat of civil penalties of up to 10% of global turnover for breaches of consumer law. And individuals who breach these laws will face fines of up to £300,000 (US$361,000).

Greenwashing

Photo by Markus Spiske from Pexels

According to a report in the London-based The Guardian newspaper, Prime Minister, Rishi Sunak, has said passing the new bill is a priority for the government. 

The report quotes Richard Reichman, a specialist in regulatory investigations and enforcement at legal firm BCL Solicitors, as saying: “Greenwashing is in the crosshairs of the regulators, and I think we will almost certainly see large fines against corporations if they ignore the warnings.”

A bigger stick the authorities are willing to use

Also quoted is Stuart Ponting, a partner in regulatory and compliance at the legal firm Walker Morris, who said: “The [Competition and Markets Authority] is limited in consumer protection matters and this will widen their powers. It’s a bigger stick and they will be more willing to use it if necessary.”

Britain’s Advertising Standards Authority also polices greenwashing claims made in the advertising environment, although it does not have the kind of disciplinary muscle envisaged in the upcoming Digital Markets, Competition and Consumer Bill.

In 2021, for example, it banned automaker Hyundai from making the claim that its Nexo fuel cell vehicle was “a car so beautifully clean, it purifies the air as it goes”.

The authority found that because Nexo did not filter and clean particulates from its own brakes and tyres, Hyundai’s claim was misleading.

In August 2022, the Unilever laundry detergent brand Persil was banned by the Advertising Standards Authority from saying the product was “kinder to our planet”, as the basis of the claim had not been made clear.

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