TRW & Co · Energy, climate and ESG
Greenwashing and Green Claims: CMA, ASA and FCA Rules
Greenwashing UK rules now carry real financial risk. Since April 2025, the CMA can fine businesses up to 10% of global turnover for misleading environmental claims without going to court. The Green Claims Code, the ASA's advertising codes and the FCA's anti-greenwashing rule all require claims to be accurate, clear, complete and backed by evidence before they are made.
Key pointThe CMA's January 2026 supply chain guidance means retailers and brands can share liability for claims originating with suppliers, so substantiation now has to be built into supply contracts, not just marketing sign-off.
At a glance
Direct CMA fines
Since 6 April 2025, the CMA can impose fines of up to 10% of global turnover or £300,000, whichever is higher, for breaches of consumer law.
Green Claims Code
Published on 20 September 2021, the Code sets six principles: truthful, clear, complete, fair comparisons, full life cycle and substantiated claims.
Supply chain guidance
On 22 January 2026, the CMA explained that responsibility for green claims can be shared by manufacturers, brands and retailers across the supply chain.
FCA anti-greenwashing rule
Since 31 May 2024, all FCA-authorised firms must ensure sustainability references are consistent with the product's characteristics and fair, clear and not misleading.
EU rules tighten
The EU green transition directive applies from 27 September 2026, banning generic environmental claims and offset-based product neutrality claims.
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The short answer: the greenwashing UK rules in 2026
As of October 2026, greenwashing UK rules are enforced through general consumer law, advertising codes and financial regulation rather than a single green claims statute. An environmental claim that is false, exaggerated, ambiguous or unsupported can breach the Digital Markets, Competition and Consumers Act 2024, the CAP and BCAP advertising codes and, for regulated financial firms, the FCA's anti-greenwashing rule.
The stakes rose on 6 April 2025, when the Competition and Markets Authority (CMA) gained power to decide for itself that consumer law has been broken and to impose fines of up to 10% of global turnover or £300,000, whichever is higher. It no longer needs to go to court first. The CMA's Green Claims Code and its January 2026 supply chain guidance set out what it expects.
The practical test is simple to state and demanding to meet: every environmental claim must be truthful, clear, complete, fairly compared, consider the full life cycle and be backed by evidence held before the claim is made.
The legal framework: who regulates green claims
Consumer law and the CMA
The core prohibition is on unfair commercial practices, including misleading actions and misleading omissions. For conduct from April 2025 those rules are in the Digital Markets, Competition and Consumers Act 2024, which replaced the Consumer Protection from Unfair Trading Regulations 2008. Business-to-business marketing remains subject to the Business Protection from Misleading Marketing Regulations 2008.
The CMA enforces these rules directly, alongside Trading Standards. Liability does not depend on intent: a claim that misleads, or is likely to mislead, the average consumer is enough. Our guide to DMCC Act consumer enforcement explains the investigation process and penalties.
The Green Claims Code and supply chain guidance
The CMA published the Green Claims Code on 20 September 2021. It is guidance rather than legislation, but it explains how the CMA interprets consumer law and is the benchmark it applies. On 22 January 2026 the CMA added Making green claims: getting it right, across the supply chain, which makes clear that responsibility can sit with manufacturers, brands and retailers, not just the business that presents the claim to consumers.
Advertising codes and the ASA
The Advertising Standards Authority enforces the CAP Code (non-broadcast) and the BCAP Code (broadcast). Section 11 of the CAP Code and section 9 of the BCAP Code require the basis of environmental claims to be clear, terms to be understood by the audience, comparisons to be clear, and absolute claims such as "green" or "environmentally friendly" to be supported by a high level of evidence, usually covering the full life cycle.
Financial services and the FCA
Since 31 May 2024, all FCA-authorised firms have had to comply with the anti-greenwashing rule. Sustainability references must be consistent with the sustainability characteristics of the product or service and be fair, clear and not misleading. The FCA's finalised guidance FG24/3 explains how it applies. The wider Sustainability Disclosure Requirements add labelling, naming and marketing rules for in-scope investment products.
Private claims and wider greenwashing UK exposure
Regulatory action is not the only greenwashing UK risk. Consumers who are misled by a misleading action can have private rights of redress under consumer law, including in some cases the right to unwind a contract or obtain a discount. Competitors may complain to the ASA or the CMA, and campaign groups increasingly do so.
For listed companies, sustainability statements in annual reports and investor materials are part of published information, so a misleading environmental statement can create exposure to investor claims as well as regulatory scrutiny. Board-level sign-off of sustainability disclosures, and consistency between marketing claims and formal reporting, is therefore a governance issue rather than only a marketing one.
The six principles of the Green Claims Code
Every greenwashing UK enforcement case so far can be mapped to one or more of these six principles. They overlap, and a single claim can fail several at once.
| Principle | What it means | Common failure |
|---|---|---|
| Truthful and accurate | Businesses must live up to the claims they make; claims must not overstate environmental benefit | Calling a product "recyclable" when only part of it can be recycled |
| Clear and unambiguous | The meaning a consumer is likely to take from a claim must be supported by evidence | Vague terms such as "eco", "conscious" or "sustainable" without explanation |
| No omission or hiding of important information | Claims must not leave out information consumers need to make informed choices | Highlighting one green feature while ignoring a larger negative impact |
| Fair and meaningful comparisons | Comparisons must compare like with like and be clear about what is compared | "Greener" or "50% less plastic" without saying compared with what |
| Consider the full life cycle | Claims should reflect the total impact of the product or service | Packaging-only claims that imply the whole product is low-impact |
| Substantiated | Robust, credible and up-to-date evidence must be held before the claim is made | Relying on a supplier’s assurance or an expired certification |
Regulators and sanctions compared
Greenwashing UK enforcement is shared between regulators with different powers. A single campaign can attract attention from more than one of them.
| Regulator | Rules | Who is covered | Main sanctions |
|---|---|---|---|
| CMA | DMCC Act 2024 unfair commercial practices; Green Claims Code | Traders dealing with consumers across the economy | Direct fines up to 10% of global turnover or £300,000, whichever is higher; directions; undertakings; daily penalties for continuing breach |
| Trading Standards | Consumer protection law, including the DMCC Act | Traders, often local or regional | Court-based enforcement, criminal prosecution for some offences |
| ASA | CAP Code section 11; BCAP Code section 9 | Advertisers and marketers in all media | Rulings requiring withdrawal, published adjudications, referral to Trading Standards |
| FCA | Anti-greenwashing rule; SDR; financial promotion rules | FCA-authorised firms | Supervisory action, enforcement, fines and public censure |
The reputational sanction is often the most damaging. ASA rulings and CMA announcements are public and widely reported, and competitors and campaign groups increasingly file complaints.
How to substantiate an environmental claim: step by step
Most greenwashing problems are evidence problems. The process below reflects the CMA's and the ASA's expectations.
- Inventory every claim. List all environmental claims across packaging, websites, social media, adverts, product names, logos and sales scripts, including implied claims from imagery and colour.
- Identify the consumer's likely understanding. Ask what the average consumer will take the claim to mean. That meaning, not the marketing team’s intended meaning, is what must be proved.
- Gather evidence before publishing. Hold robust, current evidence: life-cycle data, test results, certifications and supply chain records. Evidence obtained after a complaint is too late.
- Verify upstream information. Do not accept supplier assurances at face value. The CMA’s 2026 guidance expects businesses to verify information and secure contractual access to substantiating data.
- Qualify and explain. Replace absolute terms with specific, explained claims. If a claim relates only to packaging or one stage of the life cycle, say so clearly and prominently.
- Approve and record. Put claims through legal and technical sign-off and keep a substantiation file for each one, with a review date.
- Monitor and refresh. Re-test claims when products, suppliers, certifications or targets change, and withdraw claims that can no longer be supported.
Treat "carbon neutral", "net zero" and similar claims as high-risk. If they rely on offsetting, consumers are likely to misunderstand them unless the role of offsets is made clear. Future targets need a credible, verifiable plan. Where you cannot explain a claim simply and accurately on the label or in the advert, it is safer to drop it.
The enforcement record so far
A landmark CMA greenwashing case concerned fashion. In March 2024 it secured undertakings from ASOS, Boohoo and Asda to change how they make environmental claims, including ensuring that claims about materials are specific and clear. In September 2024 it issued a compliance guide tailored to fashion brands.
These cases pre-dated the DMCC Act's direct fining powers. Since April 2025 the CMA has been able to impose penalties without going to court, and its 2026 supply chain guidance signals that it expects manufacturers, brands and retailers to share responsibility. The ASA continues to issue rulings on misleading environmental claims across sectors including energy, aviation, consumer goods and finance.
For financial services, the FCA's guidance explains that the anti-greenwashing rule applies to sustainability references in communications with clients and in financial promotions, not only to fund documentation, and that claims must be capable of substantiation.
An illustrative scenario
This scenario is illustrative only and does not describe any real client or outcome.
A UK homeware brand sources textiles from a factory in Bangladesh and sells through its own website and two large retailers. Its packaging says "eco-friendly" and "made with sustainable cotton", and its website says the brand will be "net zero by 2030".
A review finds that only some of the cotton is certified, the certificates for one supplier have lapsed, "eco-friendly" has no explanation, and the net zero target has no published plan covering supply chain emissions. Both retailers ask for evidence under their supplier terms after reading the CMA's January 2026 guidance.
The brand replaces "eco-friendly" with a specific claim about the proportion of certified cotton, renews and audits supplier certification, adds contractual audit and data-access rights in its supply agreements, and publishes a transition plan with interim targets. Claims that cannot be supported are withdrawn. The brand now holds a substantiation file for each claim and reviews it every six months.
Risks and common mistakes
Absolute and generic claims
Terms such as "green", "eco", "sustainable" and "environmentally friendly" are treated as absolute claims requiring a high standard of evidence, usually covering the full life cycle. Few products can meet that standard.
Use specific, qualified claims that state exactly what is better and by how much.
Offset-based neutrality claims
Claims that a product or business is "carbon neutral" or "climate positive" because of offsetting are a frequent focus of regulators. Consumers may believe emissions have been eliminated or avoided.
Explain the role of offsets clearly, prioritise reductions and check the quality of any offsets relied on. In the EU, offset-based product neutrality claims are now prohibited.
Relying on suppliers without checking
The CMA’s 2026 supply chain guidance makes clear that responsibility can be shared across the supply chain. A retailer may be treated as making a claim by selling a product that displays it, and a brand cannot simply rely on a supplier’s assurance.
Build verification, audit and data-access rights into supply contracts.
Product names, logos and imagery
Green colours, leaves, globes and names such as "eco range" can convey environmental claims in themselves. The same applies to fund names using sustainability terms, which are subject to the FCA’s rules.
Review visual and naming choices with the same rigour as written claims.
Future targets without a plan
Net zero and similar commitments are claims about the future. They can mislead if the business has no credible, verifiable plan for meeting them, or if interim progress is not reported.
Publish the plan, interim targets and progress, and align claims with any sustainability reporting. See our guide to {L("uk-sustainability-reporting-standards", "UK sustainability reporting standards")}.
Cross-border angle: the EU and Bangladesh supply chains
UK businesses selling into the EU face stricter, more prescriptive rules. Directive (EU) 2024/825 on empowering consumers for the green transition applies from 27 September 2026. It bans generic environmental claims that cannot be shown to reflect recognised excellent environmental performance, claims that a product has a neutral or reduced impact based on offsetting, and sustainability labels not based on a certification scheme or established by public authorities. The separate proposed Green Claims Directive stalled in 2025, when the Commission announced its intention to withdraw it.
A claim that is acceptable under greenwashing UK rules may therefore be unlawful on the same packaging in an EU member state. Businesses selling in both markets usually find it easier to adopt the stricter standard.
Many UK fashion and homeware brands source from Bangladesh. Claims about recycled fibres, organic cotton, factory energy use or worker welfare depend on supplier data and certifications from that supply chain. Our guide to Bangladesh supply chain due diligence explains how to structure audits, contractual rights and evidence that will stand up to UK and EU regulators.
What to do now: a greenwashing UK compliance checklist
- Audit every environmental claim, including implied claims in names, logos and imagery.
- Map each claim to the six Green Claims Code principles and the CAP Code rules.
- Hold a substantiation file for each claim, with evidence obtained before publication.
- Verify supplier data and add audit and data-access rights to supply contracts.
- Remove or qualify absolute claims and offset-based neutrality claims.
- Align future-target claims with a published, credible transition plan.
- For FCA-authorised firms, check all sustainability references against the anti-greenwashing rule and SDR.
- For EU sales, check claims against the rules applying from 27 September 2026.
- Train marketing, product and sales teams, and set a review cycle.
The London office of TRW & Co is authorised and regulated by the Solicitors Regulation Authority. Our ESG and sustainability lawyers and consumer protection solicitors review green claims, respond to CMA and ASA enquiries, and draft supply chain terms. Our advertising and marketing team clears campaigns before launch, and our financial services regulation team advises on the anti-greenwashing rule. Related consumer law risks are covered in our guide to fake reviews and drip pricing. Contact our London team at info@trw.co or +880 1779 127165.
Frequently asked questions
01Is greenwashing illegal in the UK?
Yes, where an environmental claim misleads consumers. There is no single greenwashing statute, but misleading actions and omissions are prohibited under the Digital Markets, Competition and Consumers Act 2024, and misleading business-to-business marketing is covered by separate regulations. Advertising is also regulated by the ASA under the CAP and BCAP Codes, and FCA-authorised firms are subject to the anti-greenwashing rule. Since April 2025, the CMA can fine businesses directly for consumer law breaches.
02What are the fines for greenwashing in the UK?
Under the DMCC Act regime in force since 6 April 2025, the CMA can impose penalties of up to 10% of a business's global turnover or £300,000, whichever is higher, for breaches of consumer protection law, including misleading environmental claims. It can also impose daily penalties for continuing non-compliance and accept undertakings. The ASA cannot fine but can require ads to be withdrawn and refer cases to Trading Standards. The FCA has its own enforcement powers.
03What is the Green Claims Code?
The Green Claims Code is guidance published by the CMA on 20 September 2021 explaining how consumer law applies to environmental claims. It sets six principles: claims must be truthful and accurate; clear and unambiguous; must not omit or hide important information; must make fair and meaningful comparisons; must consider the full life cycle of the product or service; and must be substantiated. It is not legislation, but it reflects how the CMA interprets and enforces the law.
04Can I still say my product is carbon neutral?
In the UK, carbon neutral claims are not banned, but they are high-risk. Regulators expect businesses to explain clearly whether the claim relies on offsetting, to prioritise genuine reductions and to hold robust evidence for the claim and the offsets. The ASA has upheld complaints about unexplained neutrality claims. In the EU, claims that a product has a neutral or reduced impact based on offsetting are prohibited from 27 September 2026.
05Does the anti-greenwashing rule apply to all financial firms?
The FCA's anti-greenwashing rule applies to all FCA-authorised firms from 31 May 2024. It requires that any reference to the sustainability characteristics of a product or service is consistent with those characteristics and is fair, clear and not misleading. It covers communications with clients and promotions, not only investment funds. The FCA's finalised guidance FG24/3 explains its expectations, and the wider Sustainability Disclosure Requirements add rules for in-scope investment products.
06Are retailers responsible for suppliers' green claims?
They can be. The CMA's January 2026 guidance on making green claims across the supply chain makes clear that responsibility can be shared. A retailer may be treated as making a claim by stocking a product that displays it, and brands are expected to verify supplier information rather than accept it at face value. Businesses should secure contractual access to substantiating data and audit rights, and train staff to recognise greenwashing risks.
Sources and official materials
- Green claims code: making environmental claims (CMA) — The CMA's six principles for environmental claims
- Making green claims: getting it right, across the supply chain (CMA) — January 2026 guidance on supply chain responsibility
- Digital Markets, Competition and Consumers Act 2024 — Unfair commercial practices and CMA direct enforcement
- FG24/3: Finalised guidance on the anti-greenwashing rule (FCA) — FCA expectations for sustainability claims
- Our environmental rules (ASA) — CAP Code section 11 and BCAP Code section 9
- Green claims: CMA secures landmark changes from ASOS, Boohoo and Asda — The CMA's 2024 fashion greenwashing undertakings
- Directive (EU) 2024/825 (EU Transition Pathways) — EU green transition directive application date
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.