CMA pans green-washing

Two-fifths of green claims made in company websites are bogus, according to the Competition and Markets Authority (CMA).
A CMA co-ordinated global review of randomly selected websites found that companies are ‘using tactics that could be considered misleading and
therefore potentially break consumer law’. These included:
• Vague claims and unclear language including terms such as ‘eco’ or ‘sustainable’ or reference to ‘natural products’ without adequate explanation or evidence of the claims.
• Own brand eco logos and labels not associated with an accredited organisation.
• Hiding or omitting certain information, such as a product’s pollution levels, to appear more eco-friendly.
And since it is these claims that go some way to informing which stocks fund managers include in ESG portfolios, there are also implications for investors. The CMA is the latest regulatory authority to look at greenwashing, after the Financial Conduct Authority (FCA) announced a set of principles in November last year designed to tackle providers boasting false ethical credentials.
Similarly the European Securities and Markets Authority is also looking at the material used by financial product providers to eradicate ‘unfair competitive advantage by marketing a financial product as environmentally friendly, when in fact basic environmental standards have not been met’.
PIRC welcomes greater oversight in area that was becoming a Woke Wild West. Regulatory scrutiny is critical if investors and consumers are to have faith in products and services marketed as sustainable, particularly at a time when ‘going green’ is proving profitable for many companies.

Leave a Reply

Your email address will not be published. Required fields are marked *