G For Greed, Not For Green: UK Authorities Crack Down on Business for Misleading Ecological Claims

Legislation could see companies fined millions of pounds for making unproven environmental assertions to sell their products.

British authorities have announced plans to fine companies abusing ecological agendas for commercial purposes, reports have suggested. According to media sources, London is passing a new bill that shields society from such false claims.

New legislation will reportedly grant the Competition and Markets Authority (CMA) with new powers to impose direct civil penalties on companies involved in such activities. The new bill will give a legal definition to "greenwashing" and introduce monetary punishment for this practice. "Greenwashing" will be considered as a breach of Consumer Protection from the Unfair Trading Regulations 2008 and financial penalties will make the game not worth the candle.

"It’s easy money to make by saying: If you buy these products, then you can make a difference. Many of these claims are misleading and are not supported by evidence," stated George Harding-Rolls, the representative of Changing Markets Foundation – the organization that exposes irresponsible corporate practices.

Currently, authorities can only ban ads with false eco-claims from broadcasting.

In one example, Hyundai Nexo automobile was described by advertisers as an object that "purifies the air as it goes". Hyundai Motor UK went that far to claim that 10,000 cars of this type on the road reduced carbon emissions as if there had been planted 60,000 trees. However, the British Advertising Standards Authority (ASA) checked this claim and found that it doesn`t hold water. Despite corporate statements, Hyundai Nexo polluted the environment, forcing the regulator to rule that the ad was misleading and banned it.

Last year, ASA banned a Persil ad (owned by Unilever), which claimed that it was "kinder to our planet". The regulator decided that the statement was too vague and confusing. Currently, British authorities are investigating environmental claims of three brands – Asos, Boohoo and George at Asda.

The same rules apply to financial markets. If stocks are promoted as “green” or “eco-friendly”, these claims are double-checked. The British Financial Conduct Authority restricts the usage of such terms in investment product names.

Making false environmental claims for commercial purposes is not exactly a new issue. The term "greenwashing" itself is believed to be coined by environmental activist Jay Westerveld back in 1986, as he criticized local hotels for polluting water while urging residents to "protect reefs" by reusing towels.