Sustainable Marketing Hub

Following the introduction of the consumer protection law, the ‘Green Claims Code’ by the Competition and Markets Authority (CMA) back in early 2022, there has been an ongoing focus on what organisations are saying in relation to sustainability. This has further resulted in the Advertising Standards Agency (ASA) tightening the CAP Code which is the rule book for advertising, promotions and direct marketing. The most recent update to the guidance took place on 23 June 2023.

This guidance states: “Environmental claims are likely to mislead if the basis of the claim is not clear… Marketers must consider consumers’ likely interpretation of a claim. Where general claims could be interpreted as absolute claims, of have multiple possible interpretations, addition information is required to make the meaning of the claim clear.”

More information about these updates, as well as a summary of key advice can be found here.

In June 2023, the International Sustainability Standards Board (ISSB) issued its first sustainability-related disclosure to standards.

These standards have been developed by building on existing frameworks while focusing on reinforcing the connectivity with financial statement impacts and the overall implications for financial results and reporting.

The ISSB was established in November 2021 at COP26 with the aim to deliver a global baseline of sustainability disclosures that meet capital market needs.

Head to The International Reporting Standards’ (IFRS) website for ten things you need to know about the ISSB’s new standards.

Under the proposed Digital Markets, Competition and Consumer Bill, published on 26 April 2023 the CMA would have direct enforcement powers allowing them to impose directions and fines without having to go through the courts. Even though green claims aren’t explicitly stated in the bill, it covers, ‘behaviour likely to cause the average consumer to take a “transactional decision” that they would not have otherwise taken, for example, through misleading actions or omissions.’ This means the CMA is unlikely to face any push back in enforcing this in relation to green claims which cannot be substantiated. The fines proposed are as follows:

• up to £300,000, or 10% of a businesses’ annual turnover (whichever is higher), for breaching consumer laws;
• up to 5% of a business’s annual global turnover, with an additional daily penalty of 5% of daily turnover during non-compliance, for failing to comply with a direction.

Many industries and organisations of all sizes are opting not to talk about their environmental strategies for fear of being called out for greenwashing.

This trend is echoed in research from CIM’s recent Sustainability Skills Gap Report, which found that regulatory changes, while positive for the environment, have had a negative impact on marketing professionals’ attitudes towards sustainability campaigns, with half (49%) saying they are wary of working on them due to fears for their company or clients being accused of greenwashing.