(Bloomberg) -- The U.K.'s competition watchdog is to investigate whether companies selling everything from clothes to cars could be breaking the law by misleading the public on the environmental impact of their products.
People in Britain spent 41 billion pounds ($53 billion) on ethical goods and services last year, a four-fold increase over the past two decades, the Competition and Markets Authority said in a statement. “Greenwashing” is the use of misleading labels or advertising to create an undeserved image of environmental responsibility.
“We know that many businesses will be looking for ways to reduce their carbon footprint and we strongly support this, but the claims they make must not mislead consumers in the process,” Andrea Coscelli, chief executive officer of the CMA, said in the statement.
In addition to investigating the potential for exaggeration of environmental benefits and other misleading practices, the CMA will also probe if a company is breaking the law by, for example, failing to provide information about how polluting a product is. The scope of the inquiry will span fashion, transport, food and drink, beauty and cleaning products.
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The CMA will work with the Dutch Authority for Consumers and Markets as part of a project being done by the International Consumer Protection and Enforcement Network. From Nov. 9-20, the U.K. will coordinate with ICPEN members to conduct a “sweep” of randomly selected websites to identify the types of misleading ecological claims being made around the world.
The CMA is calling for public comment and consulting with institutions including businesses, and aims to publish guidance around the middle of next year. It hasn't taken a view on whether any laws have been broken.
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