The UK’s primary consumer protection agency, the Competition & Markets Authority (CMA), issued new greenwashing guidance regarding supply chain liability. The document titled “Making green claims: Getting it right, across the supply chain” outlines how companies are legally responsible for misleading claims made by their suppliers. This means that retailers must verify the claims of the products they sell, even if those products are produced by a third party. The document states:
“Depending on the particular circumstances, different businesses in the supply chain may hold the information required to verify claims that are made to consumers. We appreciate that it can sometimes be difficult to obtain the relevant information from other businesses. However, it is important that businesses making environmental claims take the necessary steps to ensure that claims are accurate and non-misleading. For example, in many cases, contractual arrangements may require certain assurances be given. If you are unable to obtain the information needed to satisfy yourself of the accuracy of a claim, you should consider whether you should make the claim differently, in a way you can verify.”
The CMA’s decision to extend liability for green claims down the supply chain could have significant impacts on retailers. This is particularly true of storefronts that stock cheaply made products from overseas with little supply chain visibility. Often, it is difficult to hold companies headquartered in other countries accountable for false claims, so shifting liability to retailers helps ensure consumer confidence. The CMA’s guidance also contains a checklist for retailers to use to ensure sustainability claims are backed by verifiable evidence.
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