The UK Greenwashing Crackdown: How to Make Environmental Claims That Won't Get You Fined

The Regulatory Landscape Has Shifted

Twelve months ago, greenwashing enforcement in the UK was largely limited to the Advertising Standards Authority (ASA) issuing rulings on misleading adverts. That era is over. Three separate regulatory frameworks now create overlapping, enforceable obligations for any business making environmental claims:

1. The Digital Markets, Competition and Consumers Act 2024 (DMCCA). This gave the Competition and Markets Authority (CMA) direct enforcement powers over misleading commercial practices — including greenwashing — for the first time. Since April 2025, the CMA can impose fines of up to 10% of global turnover for businesses that make misleading environmental claims. No court proceedings required. This is a seismic change.

2. The FCA's Anti-Greenwashing Rule (FCA Handbook ESG 4.3). Effective since 31 May 2024, this requires all FCA-authorised firms to ensure that any sustainability-related claims about their products and services are "fair, clear, and not misleading" — and consistent with the sustainability profile of the product. The FCA has been conducting thematic reviews and issuing supervisory letters since Q4 2024.

3. The CMA's Green Claims Code. Published in 2021 and reinforced with updated guidance in 2025, the Green Claims Code sets out six principles that environmental claims must meet. While initially advisory, the DMCCA now gives these principles legal teeth. The CMA has signalled that Green Claims Code compliance is the benchmark it will use when assessing whether claims are misleading.

What "Greenwashing" Actually Means in Legal Terms

Greenwashing isn't just outright lying about your environmental credentials. Under the current regulatory framework, any of the following can constitute a breach:

• Vague or unqualified claims. Calling a product "eco-friendly," "sustainable," or "green" without specifying what that means and providing evidence.
• Cherry-picking data. Highlighting one positive metric (e.g., recycled packaging) while ignoring material negative impacts (e.g., carbon-intensive manufacturing).
• Misleading imagery. Using green colours, leaves, or nature imagery on products that have no genuine environmental benefit.
• Carbon neutral claims based solely on offsets. The CMA has explicitly flagged claims like "carbon neutral" or "climate positive" that rely entirely on carbon offsetting without transparent disclosure of actual emissions and the quality of offsets used.
• Forward-looking claims without credible plans. Announcing a "net zero by 2040" target without a published, measurable transition plan with interim milestones.
• Hidden trade-offs. Promoting an environmental benefit in one area while a related negative impact goes undisclosed.

Who's Already Been Caught

Enforcement action has accelerated rapidly in 2025–2026. Some notable cases:

The ASA banned campaigns from multiple UK energy suppliers for claiming "100% renewable electricity" when the companies were purchasing Renewable Energy Guarantee of Origin (REGO) certificates to cover fossil-fuel-generated power — a practice the ASA ruled was likely to mislead consumers about the actual generation source.

The CMA launched formal investigations under its new DMCCA powers into fashion retailers making broad "sustainable collection" claims without adequate evidence. Several investigations remain ongoing, but the CMA has published warning letters that make clear: if you label a product line as sustainable, you must be able to demonstrate specific, verifiable environmental improvements relative to your standard range.

The FCA issued "Dear CEO" letters to over 100 asset managers in Q1 2026 following its thematic review of fund sustainability claims. The review found that 40% of funds surveyed had sustainability-related marketing that was "not fully consistent" with the fund's actual investment strategy. The FCA has given firms until Q3 2026 to remediate or face enforcement.

The Six Principles of the Green Claims Code

The CMA's Green Claims Code remains the most practical framework for ensuring your environmental claims are legally defensible. Every claim you make should satisfy all six principles:

1. Truthful and accurate. Claims must reflect the true environmental impact of your product or service. If your product is "made from 50% recycled materials," you need evidence that exactly 50% (or more) of the material content is recycled.
2. Clear and unambiguous. The claim must be understandable to the average consumer. "Lower carbon footprint" is meaningless without a comparator: lower than what? By how much? Based on what methodology?
3. No omission of important information. You cannot highlight one environmental benefit while hiding a related negative impact. If your packaging is recyclable but your manufacturing process is emissions-intensive, the claim must not mislead by omission.
4. Fair and meaningful comparisons only. Comparing your product to a competitor's must be based on like-for-like criteria, using the same methodology and boundaries.
5. Considers the full life cycle. Claims about environmental impact should account for the whole product life cycle — raw materials, manufacturing, transport, use, and end-of-life — unless the claim explicitly specifies which stage it covers.
6. Substantiated. You must hold robust, up-to-date evidence to support every claim before you make it. "We believe" or "we aim to" is not substantiation.

The Carbon Neutral Problem

One of the highest-risk areas in 2026 is "carbon neutral" product claims. The CMA and European regulators have converged on a shared position: claiming a product is carbon neutral based primarily on purchasing carbon offsets is likely to mislead consumers.

The EU's Empowering Consumers Directive, which took effect in March 2026, explicitly bans generic environmental claims that cannot be substantiated under recognised certification schemes. Several EU Member States have already fined companies for "climate neutral" labelling. The UK CMA has indicated it will take a similar approach.

This does not mean offsets are useless — but their role must be clearly communicated. Best practice in 2026 is to disclose: (a) your absolute emissions, (b) your reduction trajectory, (c) the volume and type of offsets used, (d) the offset standard and verification body, and (e) that offsets are used for residual emissions only, alongside genuine decarbonisation efforts.

Seven Steps to Greenwashing-Proof Your Business

1. Audit every environmental claim you currently make. Review your website, product packaging, marketing materials, investor presentations, social media, and job adverts. Yes, job adverts — claims about being a "sustainable employer" are also in scope.
2. Create an evidence file for each claim. For every environmental statement, document the specific data, methodology, and source that substantiates it. If you can't provide evidence, withdraw the claim.
3. Replace vague language with specific, measurable statements. Change "eco-friendly packaging" to "packaging made from 80% post-consumer recycled cardboard, certified by FSC." Change "lower emissions" to "32% lower Scope 1 and 2 emissions per unit versus our 2020 baseline, verified by [auditor]."
4. Review your net zero and carbon neutral claims. If your net zero target isn't backed by a published transition plan with interim milestones, quantified Scope 1/2/3 reduction pathways, and science-based validation, you are exposed to enforcement risk.
5. Train your marketing and communications teams. The people writing copy and designing campaigns need to understand the legal boundaries. Build a green claims approval process that routes all environmental statements through compliance review before publication.
6. Monitor regulatory updates quarterly. The CMA has announced further sector-specific sweeps for 2026–2027, targeting construction, food and drink, and financial services. Stay ahead of enforcement priorities.
7. Invest in genuine sustainability, not just communication. The most effective defence against greenwashing claims is having actual, measurable environmental performance to report. Businesses with robust emissions data, verified reduction targets, and credible transition plans can communicate confidently and accurately.

The Commercial Opportunity

The greenwashing crackdown is not just a risk — it's an opportunity for businesses with genuine environmental credentials. As vague, unsubstantiated claims are swept from the market, companies that can demonstrate real, verified sustainability performance will stand out more clearly to consumers, investors, and B2B buyers who increasingly demand evidence.

Research from the Carbon Trust (2025) found that 72% of UK consumers are more likely to trust brands that provide specific, quantified environmental claims over those using general sustainability language. The gap between "we're green" and "here is exactly how and by how much" is where commercial advantage now sits.