CMA hails landmark deal with ASOS, Boohoo, Asda in greenwashing probe

The UK’s Competition and Markets Authority (CMA) said on Wednesday that ASOS, Boohoo and George at Asda have signed “formal agreements to use only accurate and clear green claims”.

It follows the earlier launch of a probe into greenwashing claims by those three retailers in particular but also aimed at improving standards across the retail sector.

Now the CMA said “it has issued an open letter to the sector advising all fashion retailers to review their claims in light of the commitments” from the big three names.

The CMA’s CEO Sarah Cardell also said that “the millions of people who shop with these well-known businesses can now have confidence in the green claims they see”.

And in a stock exchange release, Boohoo itself said: “We are pleased to announce that the CMA has… not found Boohoo to have breached any consumer protection law”. It said it has worked closely with the body and hasn’t intentionally misled customers.

Boohoo CEO John Lyttle added that “along with the other retailers who have been a part of this process, we have chosen to sign a set of undertakings that will provide some helpful clarity on how the green claims code operates in practice”.

Back with the CMA release, it said the undertakings it has secured from the three retailers will see them “change the way they display, describe, and promote their green credentials, meaning millions of customers can expect to see clear and accurate green claims”.

Sarah Cardell said the deal “marks a turning point for the industry. 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”.

The details

So what are the details of what the retailers have agreed to?

On green claims, they have to ensure the “claims are accurate and not misleading. Key information must be clear and prominent, meaning it must be expressed in plain language, easy to read, and clearly visible to shoppers”.

Statements made about materials in ‘green’ ranges must be “specific and clear, such as ‘organic’ or ‘recycled’, rather than ambiguous” such as ‘eco’, ‘responsible’, or ‘sustainable’ without further explanation. The percentage of recycled or organic fibres must be clearly displayed and easy to see. A product can’t be called ‘recycled’ or ‘organic’ unless it meets certain criteria.

The criteria used to decide which products are included in environmental collections – such as ASOS’s former ‘Responsible edit’, Boohoo’s ‘Ready for the Future’ range, and George at Asda’s ‘George for Good’ – must be clearly set out and detail any minimum requirements. If products need to contain a certain percentage of recycled fibres to be included in the range, this should be made clear. Products mustn’t be marketed or labelled as part of an environmental range unless they meet all the relevant criteria.

The retailers also have to avoid using ‘natural’ imagery (such as green leaves), logos, or icons in a way that suggests a product is more environmentally-friendly than it actually is.

Search filters need to accurate, only showing items that meet the filter requirements. If someone searches for, say, ‘recycled’ trousers, only trousers made from predominantly recycled materials should be shown.

Any claims made to consumers about environmental targets “must be supported by a clear and verifiable strategy, and customers must be able to access more details about it”. That info has to include what the target is aiming to achieve, the date by which it’s expected to be met, and how the company will seek to achieve that target.

And statements made by the companies about accreditation schemes and standards can’t be misleading. So they have to make clear whether an accreditation applies to particular products or to the firm’s wider practices.

The three also have to regularly provide the CMA with reports on how they’re complying with the commitments they signed – as well as taking steps to improve their internal processes.

It’s clear that the CMA has picked up on ASOS, Boohoo and George at Asda given their huge size in relation to the industry as a whole.

The CMA said an estimated £57.8 billion was spent on clothing in the UK in 2022 and last year the global revenue of ASOS was £3.5 billion. In 2022, Asda’s revenue in the UK from fashion sales was £1.9 billion, according to data from Mintel. And in the same year, Boohoo generated global sales of over £1.9 billion.

The CMA’s code also comes at the same time as authorities across the EU and in specific European countries are cracking down on greenwashing.