On 22 January 2026, the UK Competition and Markets Authority (CMA) published updated guidance on making environmental claims across supply chains. The guidance provides greater clarity — and warns of enforcement — for liability for misleading "green claims" across supply chains. Any company that repeats, relies on or disseminates such claims may face enforcement action.
Key Takeaways
- Active verification: Retailers and brands cannot rely blindly on supplier assurances; they are expected to take "reasonable steps" to verify environmental claims. What is reasonable will depend on the significance of the relevant statements, availability of any underlying evidence and business resources.
- Failures to verify the statements made may trigger fines of up to 10% of global turnover under the Digital Markets, Competition and Consumers Act 2024.
- The CMA will prioritise cases involving systemic governance and compliance failures. In practice, downstream businesses, particularly retailers and customer-facing brands, are likely to be the primary enforcement targets.
- Act now: Proactive compliance and having clear processes in place is commercially prudent. The reputational and financial costs of enforcement will outweigh investment in robust controls.
Green claims compliance is not a marketing issue. Environmental, sustainability and governance (ESG) issues have become board-level consumer protection risks requiring robust internal controls, documented substantiation and active supply chain oversight.
The CMA's latest guidance reflects a broader global trend. Similar enforcement priorities have emerged elsewhere, such as from the U.S. Federal Trade Commission (updated Green Guides, 2024), the European Commission (Green Claims Directive proposal, 2023) and the Australian Competition & Consumer Commission (2023).1 Businesses operating across multiple jurisdictions face convergent but not identical standards.
Context
Building on the CMA's 2021 Green Claims Code ("Code"), the new guidance "Making green claims: Getting it right, across the supply chain" ("Supply Chain Guidance"), responds to stakeholder requests for greater clarity on how responsibility is shared between suppliers, manufacturers, brands and retailers – particularly where claims rely on information provided by third parties (such as upstream suppliers or manufacturers). It also includes a useful checklist and illustrative examples to help businesses understand how these principles may apply in practice.
What are “green claims”?
A "green claim" can take many forms. It may be an express statement, an image or logo, or even the omission of information, where the overall impression is that a product, service or business is environmentally beneficial or less environmentally harmful. Common examples include claims such as "eco-friendly", "recyclable", "sustainable" or "carbon neutral".
Under UK consumer protection law, green claims must not mislead consumers.2 As reflected in the Code and reinforced by the Supply Chain Guidance, this means environmental claims must in practice:
- be truthful and accurate;
- be clear and unambiguous;
- not omit or hide important information;
- make fair and meaningful comparisons (where comparisons are used);
- consider the full life cycle of the product or service; and
- be substantiated by robust and credible evidence, which is up-to-date.
These expectations apply across sectors (not just retail or fashion), bricks-and-mortar stores and online marketplaces, brands selling through third parties and manufacturers supplying multiple retailers.
Three key takeaways from the Supply Chain Guidance
The Supply Chain Guidance materially expands the CMA's enforcement expectations and makes clear that liability extends well beyond the originator of a claim. It provides the following helpful clarifications on how the principles distilled in the Code apply across supply chains:
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Responsibility does not stop with the originator of the claim: A business may be treated as "making" an environmental claim not only by creating it, but also by repeating, relying on or passing on a claim made by another party in the supply chain.
Example: A manufacturer labels a cleaning spray as "eco-friendly", when in fact the product contains chemicals harmful to the environment. A retailer stocks and sells the product using the same "eco-friendly" label in its marketing materials.
Outcome: Both the manufacturer and the retailer may be liable for making a misleading environmental claim.
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Claims must be capable of verification or otherwise modified: Where a claim depends on information held upstream, downstream businesses should be able to access sufficient information to verify it and are expected to take reasonable steps to do so. If verification is not possible, the CMA expects businesses to change, qualify or reconsider making the claim, or, if necessary, reassess their trading relationship with that business for that product given the legal risk to which they are exposed. The Supply Chain Guidance notes that the CMA is likely to focus enforcement on the party best placed to remedy the issue. In practice, this places retailers and downstream businesses squarely in the enforcement spotlight.
Example: A supermarket includes a brand's body wash in its "environmental range", claiming all products in the range have at least 60% organic content. The supermarket notifies the brand but does not provide any further details. In reality, the body wash contains only 10% organic ingredients.
Outcome: Both the retailer and the brand have a responsibility to ensure that the claim is not misleading, but the CMA is likely to focus on the supermarket as the entity that marketed the product with misleading credentials and is best placed to correct the issue. For instance, the retailer could withdraw the body wash from the range and substitute it with a product that satisfies the range requirements. Alternatively, the retailer could include the body wash in a different environmental range that specifically groups products with recycled packaging.
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Heightened risk where businesses should "know better": The CMA is more likely to treat conduct as particularly egregious where businesses should already be aware of their obligations (for example, due to prior enforcement) and/or lack effective internal systems for approving, verifying and reviewing environmental claims.
Example: A retailer/manufacturer sells its own-brand tents labelled "made from recycled polyester", when in fact the tents contain less than 50% recycled content. The business relied on a supplier's statement that the material is "greener as it is recycled" and did not have internal processes in place to verify the claim before marketing it.
Outcome: The CMA would likely focus its attention on the retailer/manufacturer, with regard to the business's failure to verify the claim and lack of internal procedures.
What this means for businesses and their position in the supply chain
The following summarises key steps the CMA expects retailers, brands and suppliers to take to ensure compliance with the CMA's expectations on green claims throughout the supply chain building blocks.
The most exposed companies are likely to be consumer-facing, without verification systems, that repeat third party claims.
Retailers
- Review and regularly update existing consumer-facing claims across products, marketing and labelling (including visual claims) to assess their validity and check they are up-to-date.
- Seek robust, credible and up-to-date evidence of claims (e.g. certifications) before advertising or selling products.
- Implement and follow internal processes for verifying, approving and reviewing claims, including regular checks and compliance training.
- Maintain regular contact with suppliers and monitor supply-chain changes that could affect the accuracy of claims over time.
- Ensure contractual arrangements and onboarding processes address substantiation/verification of claims.
Brands Selling Through Third Party Retailers
- Ensure all claims made are accurate and verified with up-to-date, credible evidence.
- Provide retailers with credible and up-to-date evidence for claims and make such information accessible on an ongoing basis.
- If evidence cannot be provided at the time, consider providing a declaration that product information is accurate.
Suppliers and Manufacturers
- Obtain and provide relevant evidence to support claims and retain proper records.
- Have systems in place for verifying environmental claims, facilitate supply chain transparency and provide updates as necessary. Consider alternative forms of assurance if information is confidential (e.g. independent verification).
- Avoid making casual claims that could be interpreted as verifiable claims.
- Be prepared to respond to requests for verification by those further down the supply chain, to avoid the risk of de-listing if insufficient information is provided in response to such requests.
Enforcement Trends and Practical Implications
Misleading environmental and sustainability claims remain a clear enforcement priority for the CMA.3 The publication of the Supply Chain Guidance follows closely on the entry into force of the Digital Markets, Competition and Consumers Act 2024, which significantly strengthened the CMA's consumer law enforcement toolkit.
Under the new regime, the CMA may impose administrative fines of up to 10% of global turnover or £300,000 (whichever is greater) for breaches of consumer protection law, including misleading environmental claims. The CMA may also impose daily penalties for continued non-compliance, calculated by reference to global turnover, until the breach is remedied. The financial exposure associated with greenwashing risk is therefore potentially material for large multinational groups.
Importantly, liability does not depend on intent. The Supply Chain Guidance expressly states that where the CMA is pursuing civil enforcement action, an "innocent" or "unwitting" breach remains a breach of consumer law. Further, it is not a defence for a business to argue that it took all reasonable precautions and exercised all due diligence to avoid making the misleading environmental claim. While evidence of genuine compliance efforts may influence the CMA's approach to remedies or penalty levels, it does not eliminate exposure.
Nonetheless, compliance efforts remain highly relevant. While they do not provide a complete shield from liability for misleading claims, the CMA may treat genuine attempts to comply with the law as mitigating factors when determining penalties. The Supply Chain Guidance makes clear that businesses that take proactive steps to stop and correct misleading claims before an investigation begins may benefit from reduced fines. Conversely, the CMA is likely to view the absence of robust internal processes for verifying environmental claims as particularly egregious, increasing the risk of higher penalties.
The Supply Chain Guidance also recognises the practical realities faced by retailers, especially where brands dominate and may refuse to provide substantiation – this is seen in one of the examples provided in the Supply Chain Guidance summarised as follows:
- an online retailer sells trainers labelled "100% recycled", based on product information supplied by a brand;
- despite the retailer's regular checks and evidence requests, a customer complaint reveals only the sole is recycled; and
- the retailer asks the brand to correct the claim, but the brand refuses and both continue selling the trainers with the misleading description.
In this scenario, the CMA notes that while both parties have a responsibility to ensure that the statement is accurate and not misleading, it would likely prioritise enforcement against the brand, as it can correct the claim across all retailers and is best placed to remedy the issue. However, the retailer is also exposed and will have to assess whether it should continue to sell the product if the brand refuses to correct its misleading and inaccurate statements.
The CMA has also indicated that environmentally conscious consumers may in certain circumstances be treated as a "vulnerable group". This suggests that environmental claims will be assessed not only by reference to the average consumer, but also by considering their impact on individuals who are particularly susceptible to green messaging – potentially lowering the threshold for intervention.
Cross-Border Exposure
Businesses operating internationally should be mindful that green claims may attract scrutiny in multiple jurisdictions. Enforcement activity across the EU is intensifying, with the European Commission and national regulators progressing reforms aimed at strengthening substantiation and transparency requirements for environmental claims. Divergent evidential standards and parallel investigations remain a realistic risk for multinational businesses.4
Whilst the Supply Chain Guidance is UK-specific, similar principles apply across major jurisdictions:
- EU: The proposed Green Claims Directive requires substantiation of environmental claims with life-cycle assessment; France's Climate & Resilience Law (2021) already prohibits unsubstantiated "carbon neutral" claims
- U.S.: FTC enforcement targets unqualified renewable energy and carbon offset claims; recent actions emphasise supply chain verification
- Australia: ACCC's 2023 greenwashing guidance prioritises Scope 3 emissions claims and supplier due diligence
- Asia: Singapore's new Guidelines on Quality-related claims (2025), Japan's enforcement of environmental claims under the Unjustifiable Premiums and Misleading Representations Act and South Korea's Environmental Labeling and Advertising Review Guidelines reflect similar substantiation requirements.
- Multinational businesses should adopt compliance frameworks that meet the most stringent applicable standard.
M&A Implications
The Supply Chain Guidance is also relevant in an M&A context. Acquirers should consider incorporating a review of environmental claims, marketing materials and substantiation processes into consumer law due diligence and seeking indemnities in SPAs – particularly where valuation or strategic positioning is linked to sustainability credentials. Weak verification frameworks or unsupported claims may give rise to post-closing enforcement risk and reputational exposure.
Governance Expectations
The Supply Chain Guidance underscores that green claims risk is no longer confined to marketing teams. It requires cross-functional governance involving legal, compliance, sustainability, procurement and senior management. Businesses without documented review, substantiation and escalation processes may face heightened enforcement scrutiny and penalties, particularly where deficiencies appear systemic.
Green claims compliance has evolved into a board-level consumer protection issue requiring structured oversight, clear accountability and robust internal controls across the supply chain. Businesses lacking documented review and verification processes may face increased enforcement exposure.
1 Greenwashing and sustainability - a clear enforcement focus for regulators | White & Case LLP.
2 The previous legislative framework, the Consumer Protection from Unfair Trading Regulations 2008, has been replaced by provisions on unfair commercial practices in the Digital Markets, Competition and Consumers Act 2024 (in respect of conduct from April 2025).
3 Environmental claims made in advertising are also subject to oversight by the Advertising Standards Authority (ASA), which operates a parallel regulatory regime for marketing communications.
4 See our previous updates: Greenwashing risk and the fashion industry: a snapshot of legal developments | White & Case LLP; ACCC issues draft greenwashing guidelines | White & Case LLP.
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