Greenwashing risks grow | WARC | The Feed
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Greenwashing risks grow
Greenwashing may soon involve more than a slap on the wrist from the Advertising Standards Authority, as new legislation and regulations in the pipeline significantly increase the risks to businesses that are found guilty of the practice.
Why it matters
Making unsubstantiated claims in breach of consumer law could soon be penalised by fines of up to 10% of global turnover, the Guardian reported. Brands will need to be very certain of their sustainability messaging and may need to rethink internal structures to ensure nothing slips through the cracks.
- The upcoming Digital Markets, Competition and Consumer Bill is expected to give powers to the Competition and Markets Authority (CMA) to impose direct civil penalties on companies making misleading environmental claims.
- The Financial Conduct Authority (FCA) has proposed a package of measures designed to protect investment consumers, including restrictions on how certain terms such as “green” or “sustainable” can be used in investment product names and for marketing.
- In its recent annual report, banking giant HSBC recognised a greenwashing risk – and potential regulatory fines – if it failed to achieve its stated net zero ambitions. “We consider greenwashing to be an important emerging risk that is likely to increase over time,” it said.
- The EU last year targeted greenwashing as part of its European Green Deal package; a new draft EU law will require companies to back up green claims with evidence.
“Greenwashing is in the crosshairs of the regulators, and I think we will almost certainly see large fines against corporations if they ignore the warnings” – Richard Reichman, a specialist in regulatory investigations and enforcement at BCL Solicitors, speaking to the Guardian.
Sourced from Guardian, FCA, HSBC, Euronews
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