Trust Issues in Fashion: The new CMA Legalisation

With the birth of transparency within the fashion industry, greenwashing became a byproduct, a misleading movement made successful through buzzwords. As a consumer in the age of eco-consciousness and awareness, do we have enough information about the clothes we wear?

Most of us find it easy to trust data – it’s simpler to digest tokenistic gestures such as superficial umbrella statements instead of facts or believe the text on any infographic over personal research. This often results in uninformed opinions, leading to misleading information and a movement without proof or action.

Transparency is a blurred line, a topic that is over discussed yet under-performed; however, the conversation has progressed over the years. In 2019, BOF and McKinsey&Company’s yearly report “The State of Fashion” states “Radical Transparency” as a trend in consumer shifts; saying, “unless fashion brands adopt best practices from outside the industry and improve supply chain transparency from within, consumers will begin to wonder what [the company’s] have to hide.” Giants such as Arket, owned by H&M, started listing where each product is made, showing pictures from the manufacturing floor. Retailer Reformation created “RefScale” to measure its garments environmental impact by tracking carbon dioxide and water used in production and sharing the results with customers. Adidas, Stella McCartney, Gabriela Hearst are amongst the brands that have adopted a “timeline” or “history” as a stamp of environmental accountability, listing their yearly achievements, commitments and future goals. Most industry giants now have an online website dedicated to sustainability. But is this enough for transparency? What do these gestures mean for ethical shoppers?

In September 2021, The Competition and Markets Authority (CMA), in conjunction with Consumer Protection from Unfair Trading Regulations (CPR) of the UK Government, released official guidance for businesses making environmental claims on goods and services called the Green Claims Code to tackle greenwashing and misleading information from business to consumer. The guide sets out the legal framework and requirements of which companies must ensure that the principles for their environmental claims are:

  • Truthful and accurate
  • Clear and unambiguous
  • Does not omit or hide important information
  • Compare goods or services in a fair and meaningful way
  • Consider the entire life cycle of the product or service
  • Are substantiated

The framework became official after the CMA’s investigation on greenwashing to consumers found that 40% of “green claims” made online could be misleading. So what does this mean for transparency? This legislation could change the way brands approach transparency and the way we as consumers approach brands. The guidance will affect the way, but not limited to how a business, brand or service, markets its products, from advertisements, labelling, packaging, product names, and other accompanying information made from business to consumer. Organisations that make environmental claims must comply with the guide. This applies throughout the supply chain, from manufacturers, wholesalers, distributors and retailers. For example, vague terms or general claims such as “environmentally friendly”, “eco”, or “sustainable” does not provide an accurate indication. Claiming that a product is “biodegradable”, “compostable”, or “recyclable” can also be misleading; instead, products should carry a description and instructions to explain processes or the equipment needed to expand a products life cycle. Brands should no longer get away with simply stating that their products are “better for the environment” without mentioning how. A statement such as “sustainable farmed yarn” is more direct.

Businesses should also use language and terminology that consumers easily understand. For example, “net-zero” or “carbon neutral” are not accessible or apparent terms. The CMA understands that the demand for information transparency on a product can’t be fully printed on the packaging or shown in a store, which is why they also encourage visibility through a link to information on a website or a QR code. Misleading information can also include cherry-picking facts or figures to share. For example, this is not transparent if a company claims to invest 10% more into green gas energy but does not disclose that they currently invest 40% in fossil fuel. Information should also regard manufacturing and supply chain processes. For example, an “eco-shampoo” uses raw organic materials wrapped in paper packaging but in non-recyclable film, then shipped via air freight to the UK from a factory without sustainable certification. The amount of information displayed as part of the sustainability credentials on the shampoo bar should help a customer make a purchase decision. The five new principles will act as a benchmark to detect if a company is genuinely committed to sustainability. Brands and businesses have a year to adhere to the requirements. The CMA will start reviewing claims made in 2022, with the fashion and textiles industry being at the top of their target list, which is a hopeful step towards a more trusting future.

Photography: Photo by Mumtahina Tanni

A great example of an organisation ahead of time is Sheep Inc, a carbon-negative knitwear brand with extensive information on its production. Sheep Inc works with raw materials; their manufacturing is wholly powered by solar energy, against the polluting synthetic material, micro-plastics and carbon pollution that is usually the DNA behind our clothes. They source their wool from local sheep farmers in New Zealand who are part of the ZQ Program, which focuses on animal welfare while playing a pivotal role in regenerative farming. They are also chlorine-free and use techniques that are safe for human skin and harmless towards the sheep. With their revenue, they invest 5% into regenerative projects through their Impact Program. This information is available on their website, backed by the information on the third party companies mentioned.

How will this change the way I consume? I hear you asking. Obsolete expressions such as “sustainable collections” or “organic cotton” on shop windows and printed labels are not enough for those who are past buying ourselves into sustainability. Influencers and brands will no longer be able to copy and paste statements for their paid partnerships. The Green Claims Code should make facts accessible to enable an informed choice. The decision to purchase clothing should align with our morals. As well as providing credible and factual evidence, companies must actively engage in environmental causes and share statements they can measure.

Read more about the Green Claims Code here.

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