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UK Fashion Retailers ASOS, Boohoo and Asda to Change Green Claims after Regulator Investigation – ESG Today
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UK Fashion Retailers ASOS, Boohoo and Asda to Change Green Claims after Regulator Investigation
Mark Segal
March 27, 2024
The UK’s Competition and Markets Authority (CMA) announced that it has signed formal agreements with fashion retailers ASOS, Boohoo and George at Asda, securing “landmark changes” in their advertising and promotion of the environmental sustainability credentials of products, ensuring that only clear and accurate green claims are made by the companies.
The agreements were announced after an investigation by the CMA, launched in July 2022, following the identification by the regulator of potential greenwashing concerns in its review of the fashion sector earlier that year.
Among the concerns raised by the CMA’s sector review were claims made by companies into the environmental sustainability of their products, such as the use of recycled material, without providing information on the basis of the claims or to which products they refer.
Upon launching its investigations into ASOS, Boohoo and George at Asda, the CMA said that it would focus on issues including whether the language used on collections such as ASOS’ “Responsible Edit,” Boohoo’s “Ready for the Future,” and George at Asda’s “George for Good,” created the impression that they are more environmentally sustainable than they actually are, in addition to the criteria used for inclusion in the collections and if the criteria are followed, and the information provided to consumers about the products. The CMA also said that it would look into statements made by the companies about fabric accreditation schemes and standards.
In the agreements with the retailers, each committed to a series of actions, including ensuring that all green claims are accurate and not misleading, with key information made clear and prominent and in plain language and easy to read, and that the companies will avoid the use of generic environmental terms describing fabrics – such as “eco,” or “sustainable” – with more specific terms such as “organic” or “recycled” allowed if the products meet specific criteria. The companies also agreed not to use “natural imagery” that suggest that products are more environmentally friendly than they actually are.
The companies also agreed that criteria used to include products in their environmental collections will be clearly set out, and that any claims made environmental targets must be supported by a clear and verifiable strategy, with information available to customers including what the target is aiming to achieve, the date by which it is expected to be met, and how the company in question will seek to achieve that target.
In addition, the companies agreed to provide CMA with regular reports on their compliance with the new commitments.
Sarah Cardell, Chief Executive at the CMA, said:
“Following our action, the millions of people who shop with these well-known businesses can now have confidence in the green claims they see.”
The CMA noted that the new commitments were made voluntarily, and that the companies have not made admissions of wrongdoing or liability.
In addition to the new agreements, the CMA announced that it has issued an open letter to the fashion retail sector, urging businesses to review their green claims and practices in light of the three retailers new undertakings, which the regulator said “set a benchmark for the industry.”
Cardell added:
“The commitments set a benchmark for how fashion retailers should be marketing their products, and we expect the sector as a whole – from high street to designer brands – to take note and review their own practices.”
Mark founded ESG Today following a 20 year career in investment management and research. Prior to founding ESG Today, Mark worked at Delaney Capital Management (DCM) in Toronto, Canada, most recently as the firm’s head of U.S. equities. While at DCM, Mark was part of the firm’s ESG team, responsible for evaluating and tracking the sustainability factors impacting portfolio companies, and assessing the suitability of companies for portfolio inclusion. Mark also spent several years in the sell-side research industry, covering the technology and services sectors. Mark holds an MBA from Columbia University in New York, a BBA from the Schulich School of Business at York University in Toronto, and is a CFA charterholder.
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