LONDON (ShareCast) - (Sharecast News) - Two online fashion giants and a supermarket came under the scrutiny of the Competition and Markets Authority (CMA) on Friday, over the eco-friendly and sustainability claims made about products including clothing, footwear, and accessories.
The regulator said the move was part of its ongoing investigation into potential greenwashing, following concerns around the way products were being marketed to customers as "eco-friendly".

It said it had launched investigations into Asos, Boohoo and Asda's fashion and homewares brand George.

The CMA said it would look at whether the statements and language used by the businesses were too broad and vague, possibly creating the impression that clothing collections - such as the 'Responsible edit' from ASOS, Boohoo's current 'Ready for the Future' range, and Asda's 'George for Good' - were more environmentally sustainable than they actually are.

It would also investigate the criteria used by some of the businesses to decide which products to include in the collections, and whether it might be lower than customers would "reasonably expect" from the descriptions and overall presentation, pointing to the fact that products could contain as little as 20% recycled fabric.

The watchdog also said it would investigate some items being included in the collections when they did not meet the criteria, and added that there was a "lack of information" provided to customers about products included in any of the ranges, such as missing information about what the fabric was made from.

Its investigation would also see whether statements made by the companies about fabric accreditation schemes and standards were potentially misleading, such as a lack of clarity as to whether the accreditation applied to particular products or to the firm's wider practices.

"People who want to 'buy green' should be able to do so confident that they aren't being misled," said the CMA's interim chief executive Sarah Cardell.

"Eco-friendly and sustainable products can play a role in tackling climate change, but only if they are genuine.

"We'll be scrutinising green claims from Asos, Boohoo and George at Asda to see if they stack up."

Cardell said that should the companies be found to be using misleading eco claims, the authority would not hesitate to take enforcement action - through the courts if necessary.

"This is just the start of our work in this sector and all fashion companies should take note - look at your own practices and make sure they are in line with the law."

The CMA said it had written to the three firms outlining its concerns, and would use its information-gathering powers to obtain evidence to progress the investigation.

It said possible outcomes included securing undertakings from the companies to change the way they operate, taking the firms to court, or closing the case without further action.

The move came after the CMA published its 'Green Claims Code' in September, which aimed to help businesses understand how to communicate their green credentials, while avoiding the risk of misleading shoppers.

Both Asos and Boohoo responded to the CMA's announcement on Friday morning, promising to work with the regulator in its investigation.

"Asos will cooperate with the investigation and is committed to playing its part in making fashion more sustainable, including providing clear and accurate information about its products," the FTSE 250 firm said in a market announcement.

It added that it would not comment further on the investigation at this stage.

The AIM-traded Boohoo, meanwhile, said it would "continue to work collaboratively with the CMA, and is committed to providing its customers with accurate information on the products they buy".

"Boohoo does not intend to comment further on the investigation at this stage."

At 0946 BST, shares in Asos were up 2.76% at 1,077p, while those in Boohoo were ahead 2.38% at 67.67p.

Reporting by Josh White at Sharecast.com.

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