Greenwashing under scrutiny: The CMA’s new powers to tackle misleading environmental claims

Key takeaways

• From 6 April 2025, the UK Competition and Markets Authority can directly enforce consumer protection law and issue fines of up to 10% of global turnover, including for misleading environmental claims (so-called 'greenwashing').
• The CMA has published updated guidance highlighting the types of green claims likely to trigger enforcement, including vague, unsubstantiated or incomplete messaging.
• Greenwashing remains a regulatory priority, and consumers with strong environmental concerns may be treated as a vulnerable group under the law.
• Businesses' legal teams should as a priority review marketing and sustainability claims, ensuring that they are accurate, substantiated and clearly communicated – and that governance processes are robust.

Under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), the UK Competition and Markets Authority (CMA) now has the power to directly fine companies up to 10% of their global turnover for breaches of consumer law – including misleading environmental claims, or so-called 'greenwashing'.

This marks a significant shift away from the previous court-based model and elevates consumer law enforcement to a level more akin to competition law.

Environmental claims in the spotlight

While the DMCCA does not introduce a new regime specific to greenwashing, misleading or vague environmental messaging already falls squarely within the scope of consumer protection law – and the CMA has made clear that it will be a priority area for early enforcement.

The CMA’s recent guidance on unfair commercial practices includes several examples of greenwashing, such as:

• Making general claims like "eco-friendly" without sufficient substantiation;
• Highlighting a positive environmental attribute while omitting material information (e.g. omitting emissions from other stages of the product lifecycle);
• Suggesting that a product or service is more environmentally beneficial than it really is.

These types of claims can mislead the average consumer – or, importantly, a consumer who is particularly motivated by environmental factors. The CMA’s guidance explicitly recognises this group as potentially vulnerable to misleading claims, and businesses should factor that into their risk assessments.

Key enforcement powers now in effect

The CMA has the ability to:

• Investigate suspected breaches of consumer protection law;
• Require undertakings from businesses to cease or modify offending conduct;
• Issue direct financial penalties of up to 10% of global group turnover;
• Impose directions, such as requiring the removal of misleading statements from websites or marketing materials; and
• Act more quickly, with a statutory duty of expedition.

This is a major expansion of enforcement tools, which is likely to have a particular impact on consumer-facing businesses operating across sectors such as retail, fashion, food and beverage, travel, hospitality and financial services — all of which have seen recent scrutiny of environmental claims.

What should legal and compliance teams be doing now?

Even if your business is already familiar with the Green Claims Code (which remains highly relevant), the CMA’s ability to impose substantial direct penalties adds a new layer of urgency to reviewing how environmental messages are used.

Legal teams should:

• Reassess environmental marketing claims in light of the CMA’s updated guidance;
• Map where in the business such claims are made – across advertising, labelling, digital content, and sustainability reporting;
• Ensure that all claims are clear, substantiated, and not misleading (whether by action or omission); and
• Review governance processes around sustainability communications, particularly where marketing teams may be operating independently.

With the CMA indicating that early enforcement will focus on more egregious breaches – including objectively false claims – businesses that take a proactive compliance approach now will be best placed to avoid regulatory intervention later.

If you would like to understand how the CMA’s new powers could affect your business – or need support reviewing your environmental claims, governance processes or wider consumer law compliance – please contact Regulatory Partner Jessica Gardner. Jessica advises clients across sectors on green claims risk, CMA investigations and regulatory compliance