The Greenwashing Crackdown is Here: Understanding the DMCC Act's New Consumer Powers
This week marks a significant moment for consumer protection and business ethics here in the UK. As the founder of Avallen Solutions, having helped build Avallen Calvados with sustainability at its core, and now helping others navigate this complex landscape, I've been closely watching the progress of the Digital Markets, Competition and Consumers (DMCC) Act. Now, the crucial citizen (I’ll use the term citizen over consumer throughout this article except when naming the act specifically) protection elements of this Act are coming into force, specifically targeting unfair commercial practices – and high on that list is the pervasive issue of greenwashing.
For years, we've seen a rising tide of environmental consciousness among citizens. I truly believe that people genuinely want to make better choices, support businesses doing good, and reduce their impact on the planet, provided they have the financial resources to do so of course. However, this positive shift has unfortunately been exploited by some businesses making vague, misleading, or outright false claims about their environmental credentials. This isn't just unfair to citizens; it actively harms businesses like ours, and those we work with, who invest time, effort, and resources into genuine sustainability initiatives. Greenwashing muddies the waters, erodes trust, and makes it harder for truly sustainable products to stand out.
That's where the DMCC Act steps in.
What is the DMCC Act and Why Does it Target Greenwashing?
The DMCC Act, which received Royal Assent in 2024, is a substantial piece of legislation designed to update the UK's competition and citizen protection laws for the modern age, particularly addressing challenges posed by digital markets. While it covers various areas, the part making headlines this week directly empowers the Competition and Markets Authority (CMA) to tackle unfair commercial practices more effectively.
Crucially, the Act strengthens the prohibition of misleading commercial practices. This includes giving false information or omitting material information that might cause the average citizen to make a transactional decision they wouldn't have otherwise made. Environmental claims fall squarely into this category.
The reasoning is clear: if a company markets a product as "eco-friendly," "sustainable," "biodegradable," or "carbon neutral" without clear evidence or qualification, it's potentially misleading citizens and gaining an unfair competitive advantage. The DMCC Act gives the CMA enhanced powers to investigate these practices and, significantly, to directly impose substantial fines (up to 10% of global turnover for businesses) without needing lengthy court processes for certain infringements.
A Brief History: From Green Claims Code to DMCC Enforcement
This isn't coming out of the blue. The CMA has been signalling its intent to crack down on greenwashing for some time. Back in 2021, they published the Green Claims Code, outlining six key principles for businesses making environmental claims:
Claims must be truthful and accurate.
Claims must be clear and unambiguous.
Claims must not omit or hide important relevant information.
Comparisons must be fair and meaningful.
Claims must consider the full lifecycle of the product or service.
Claims must be substantiated.
This code provided guidance, but the DMCC Act now provides the regulatory muscle to enforce these principles much more robustly. The new powers coming into effect this week represent the transition from guidance to direct enforcement capability.
Examples of Greenwashing Scrutiny
We've already seen regulators, particularly the Advertising Standards Authority (ASA) and the CMA, scrutinising environmental claims even before the DMCC Act's full powers came online. Several sectors have been in the spotlight:
Fashion: Brands making vague claims about "sustainable collections" without clear criteria or transparency about manufacturing processes.
Travel: Airlines facing challenges over carbon offsetting or "lower emission" flight claims that lacked sufficient context or evidence.
Food and Drink: Companies have faced ASA rulings for potentially misleading packaging recyclability claims or unsubstantiated "natural" or "eco" statements. Innocent Drinks, for example, faced scrutiny over ads linking purchasing their products to environmental benefits without reflecting the full lifecycle impact of single-use plastic bottles. Similarly, Oatly had ads banned for selectively using emissions data in comparisons with dairy milk.
These examples highlight the types of practices the CMA will now be targeting with renewed vigour and stronger enforcement tools under the DMCC Act. Vague terms, cherry-picked data, lack of full lifecycle consideration, and unsubstantiated claims are all on notice.
What Does This Mean for Your Business?
For businesses, especially in the drinks industry where provenance, packaging, and production methods are key consumer considerations, the message is clear: authenticity and evidence are paramount.
The era of vague "green" marketing is over. Your environmental claims must be specific, accurate, easily understood, and backed by credible evidence. If you claim your packaging is recyclable, is it easily recyclable in practice by citizens across the UK? If you claim lower emissions, compared to what, and how did you measure it? If you use terms like "sustainable" or "eco-friendly," what exactly do you mean, and can you prove it?
While this might seem daunting, it's ultimately a positive step. It levels the playing field, rewarding companies committed to genuine environmental progress and helping citizens make informed choices they can trust.
Looking Ahead
This is just a brief overview of the changes coming into force. The implications are significant, and navigating the requirements demands careful attention. Here at Avallen Solutions, we'll be diving deeper into the specifics over the coming weeks. Later in April, we plan to publish further articles exploring:
A detailed breakdown of the prohibited practices under the new rules.
Practical steps businesses can take to ensure compliance.
How to communicate your sustainability efforts authentically and effectively.
The DMCC Act's new powers signal a serious commitment to tackling greenwashing. It's time for all businesses to review their communications, ensure their green claims are watertight, and embrace transparency. Building trust through authentic action is not just good ethics; it's increasingly essential for business success.
If you're unsure how these changes affect your brand or need guidance on substantiating and communicating your sustainability initiatives, please don't hesitate to reach out. We're here to help you navigate this evolving landscape.
