FMCG come under CMA's greenwashing gaze
(Photo by Lars Frantzen, CC 4.0)

FMCG come under CMA's greenwashing gaze

How green is 'greener'? The £130bn fast-moving consumer goods sector comes under the scrutiny of the UK Competition and Markets Authority.

Summary: The UK Competition and Markets Authority (CMA) has launched an investigation into "greenwashing" in the fast-moving consumer goods (FMCG) sector, which is worth more than £130bn per year. Their aim is to assess whether consumers, who could end up paying more for goods that claim to be more environmentally friendly, are being misled. The authority will scrutinise online and in-store claims about environmentally friendly products to discover if broad "eco-statements" or claims about the use of recycled or natural materials are actually being upheld.

Why this is important: Tolerance for misrepresentation, particularly where a price premium is involved, is increasingly low and could lead to longer term reputational and brand damage.

The big theme: There has been a shift in thinking from considering just the impacts 'of' the environment, social and governance aspects and how they impact a business, to also considering the impact of the business 'on' the environment and society as a whole. This concept of 'Double Materiality' is also being embedded in reporting and disclosure requirements for both corporates and asset managers. Organisations need to consider a broader group of stakeholders interests including employees, customers and the community at large.

The details

Summary of a press release from The UK Government

The CMA is expanding their work into greenwashing by reviewing products in the FMCG category. With almost 91% of all dishwashing products and all toilet products marketed as 'environmentally friendly' the concern is that shoppers may be being misled as to the true extent of these claims and even worse, potentially driven to pay a premium for those products. The average household spends almost £70 per week on food and drink alone with the FMCG sector worth more than £130bn annually.

In January of 2022, the CMA began focusing on the fashion sector bringing enforcement actions against Boohoo, George at Asda and ASOS in the middle of 2022. In its Annual Plan consultation 2023 to 2024, the CMA gave details on its priority to support the acceleration of the transition to a net zero economy and promote environmental sustainability.

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