What Counts as Greenwashing

In the UK there is no law written just for greenwashing. Environmental claims are covered by general consumer law, now Part 4 Chapter 1 of the Digital Markets, Competition and Consumers Act 2024 (DMCC Act), which replaced the Consumer Protection from Unfair Trading Regulations 2008 for conduct from April 2025. Three sets of standards build on it: the CMA's Green Claims Code and its supply-chain guidance, the ASA's advertising codes, and, for financial services, the FCA's anti-greenwashing rule. The CMA can now decide breaches itself and fine businesses up to the higher of £300,000 or 10% of turnover.

Approach: I read the CMA's January 2026 guidance on green claims across the supply chain. I then opened the DMCC Act on legislation.gov.uk, the Green Claims Code on GOV.UK, the ASA's page on its environmental rules and the FCA's guidance FG24/3. I didn't check whether Directive (EU) 2024/825 applies in Northern Ireland.

1. The law: DMCC Act 2024, Part 4 Chapter 1 (in force 6 April 2025)

• The core ban: section 225 prohibits unfair commercial practices (Part 4).

• Misleading actions (s.226): a practice is misleading if it gives false or misleading information, or if its "overall presentation" is likely to deceive the average consumer. That applies "even if the information it contains is true" (s.226).

• Misleading omissions (s.227): leaving out information the average consumer needs to make an informed decision. It also covers giving that information in a way that is unclear, comes too late or is unlikely to reach the consumer (s.227).

• Other provisions that matter here:

  • section 229 (failing to meet the requirements of professional diligence);
  • sections 237 and 240 (criminal offences and penalties) (Part 4).

• Schedule 20 (practices banned in all circumstances): I found no paragraph aimed at environmental claims as such. These general items apply to them:

  • para 3: displaying a trust mark, quality mark or equivalent without authorisation;
  • para 4: falsely claiming approval or endorsement;
  • paras 1 and 2: false claims about codes of conduct;
  • para 11: presenting rights consumers have by law as a distinctive feature of your offer (Schedule 20).

  There is no UK equivalent of the EU's outright bans on generic claims or offset-based "carbon neutral" claims. In the UK those claims are judged case by case under sections 226 and 227.

2. CMA guidance

Green Claims Code (published 20 September 2021). It applies to manufacturers, wholesalers, distributors, retailers and online marketplaces, and covers B2B marketing too (Green Claims Code). Claims must:

1. be truthful and accurate;
2. be clear and unambiguous;
3. not omit or hide important information;
4. make only fair and meaningful comparisons;
5. consider the full life cycle;
6. be substantiated.

Broad terms like "green" or "eco-friendly" need substantial proof.

The Code was written under the 2008 Regulations. The CMA says the DMCC provisions "broadly mirror or extend" those Regulations, so its guidance "continue[s] to apply in substance" ^[10].

Supply-chain guidance (January 2026) ^[10]:

• What "making" a claim covers: what you say, logos and imagery, and what you leave out. Simply stocking a product can amount to repeating its claim, so the manufacturer and the retailer can both be liable.
• No intent needed: an innocent breach is still a breach in civil enforcement. Taking all reasonable precautions and due diligence is not a defence in civil actions.
• If you can't verify a claim: reword it in a way you can verify. If a supplier won't back up its claim, consider whether to keep that trading relationship for the product.
• Key information goes next to the claim: on the label or on the same side of the tag. Consumers should not have to scan a QR code or click a link to get it. The guidance's example is a cloth that is compostable only through specialist processing.
• Who the CMA is likely to target: businesses that should already know the rules, for example because guidance or ASA rulings exist, even in other sectors. Also businesses with no internal processes for verifying claims, or that don't follow them.
• Effect on fines: genuine attempts to comply, and correcting a problem before an investigation opens, may count in your favour when a fine is set.
• Checklists: the guidance has separate checklists for retailers, brands and suppliers. They cover obtaining evidence in advance, supplier declarations, random checks, and passing on changes in the supply chain.

3. Enforcement and penalties

• Direct enforcement: since April 2025 the CMA can decide infringements itself, give directions, order redress to consumers and fine businesses without going to court ^[10].
• Maximum fine: "not exceeding £300,000 or, if higher, 10% of the total value of the turnover" (DMCC Act s.182(5)) (Part 3).
• Other routes: the CMA can still go to court and keeps criminal powers for appropriate cases. Trading Standards can also enforce ^[10].

4. Advertising: ASA (CAP and BCAP Codes)

The rules are in CAP Code section 11 and BCAP Code section 9 (ASA environmental rules):

• the basis of a claim must be clear (CAP 11.1 / BCAP 9.2);
• every term must be clear to consumers (CAP 11.2 / BCAP 9.3);
• comparisons must state their basis (CAP 11.3 / BCAP 9.4);
• absolute claims such as "green" need robust evidence covering the whole life cycle (CAP 11.4 / BCAP 9.5).

The CMA says its Green Claims Code is consistent with the CAP and BCAP Codes ^[10].

5. Financial services: FCA anti-greenwashing rule (ESG 4.3.1R, from 31 May 2024)

• The rule: any reference to a product's or service's sustainability characteristics must match what it actually has, and be fair, clear and not misleading.
• Who it covers: all FCA-authorised firms, whether or not the Consumer Duty applies to them. It covers communications with UK clients and financial promotions they communicate or approve.
• What the FG24/3 guidance expects: claims must be:
  • correct and capable of substantiation;
  • clear;
  • complete, considering the full life cycle;
  • fair in any comparison.
• Claims about the firm itself: these fall under CMA and ASA guidance and FCA Principles 6 and 7 or the Consumer Duty.

The FCA says the rule is consistent with the CMA and ASA guidance (FG24/3; FCA press release).

Next, I can check how sector rules overlap with these, such as GB cosmetics or food claims rules, or set out how the UK and EU 2024/825 differ claim by claim.

Sources: DMCC Act 2024 Part 4 · s.226 · s.227 · Schedule 20 · Part 3 (s.182) · CMA Green Claims Code · ASA environmental rules · FCA FG24/3 · FCA press release

In the EU, greenwashing is now banned through the Unfair Commercial Practices Directive (UCPD) as amended by Directive (EU) 2024/825. Member States have had to apply the new rules since 27 September 2026. Like the UK, the EU has no standalone greenwashing law, but the amended UCPD adds outright bans that UK law does not have. In the US, the FTC Act's ban on deceptive practices is the federal rule. The FTC's Green Guides (16 CFR 260) are its non-binding view of how that ban applies to green claims, and states add their own laws, with California going furthest.

Approach: I read the full text of Directive 2024/825 and the FTC Green Guides. I then checked official sources: the Parliament's procedure file, the EESC, ESMA, CalRecycle and the California Senate's analysis of AB 1305. EUR-Lex, the California legislature site and the Federal Register would not open, so I couldn't confirm the UCPD fine ceilings, the enacted text of California's laws or the status of the FTC's review of the Green Guides.

EU

1. The law: UCPD 2005/29/EC as amended by Directive 2024/825

• Timing: Member States had to adopt their laws by 27 March 2026 and apply them from 27 September 2026 ^[3]. Businesses are bound by each country's implementing law, so national wording and penalties apply.

• Key definitions (new Article 2(o) to (s) UCPD) ^[4]:

  • Environmental claim: any voluntary message in any form, including labels, brand names, company names and product names, that says or implies a positive or zero impact, less harm than others, or improvement over time.
  • Generic environmental claim: a claim that is not on a sustainability label and whose specifics are not given "in clear and prominent terms on the same medium".
  • Certification scheme: must be:
    • open to all traders on fair terms;
    • developed with experts and stakeholders;
    • backed by procedures for withdrawing or suspending the label;
    • monitored by a third party independent of both the scheme owner and the trader.
  • Recognised excellent environmental performance: meeting the EU Ecolabel (Regulation 66/2010), an officially recognised EN ISO 14024 type I ecolabel, or top performance under other EU law.

• Banned in all circumstances (new Annex I points) ^[5]:

  • 2a: self-made sustainability labels;
  • 4a: generic claims without recognised excellent performance;
  • 4b: claims about the whole product or business when only one part or activity qualifies;
  • 4c: offset-based "neutral", "reduced" or "positive" greenhouse-gas claims;
  • 10a: presenting legal requirements as a special feature.

  The same Annex adds bans on durability, repair and software-update practices (points 23d to 23j), such as falsely claiming a product can be repaired.

• Judged case by case:

  • Article 6(2)(d), future-performance claims: these need clear, public, verifiable commitments and a detailed, realistic plan with measurable, time-bound targets and resources, checked regularly by an independent third-party expert whose findings are made available to consumers.
  • Article 6(2)(e): advertising benefits that are irrelevant to the product.
  • Article 6(1)(b): environmental and circularity features (durability, reparability, recyclability) now count among a product's main characteristics.
  • Article 7(7): comparison tools that rate environmental features must disclose their method and what they compare ^[4].

• Review: the Commission must report on how the Directive is working by 27 September 2031 ^[23].

2. The Green Claims Directive (proposed 2023): stalled

This proposal would have set rules on how to substantiate and verify claims in advance. Parliament adopted its first-reading position on 12 March 2024 and opened negotiations in December 2024. The Parliament's procedure file still shows it "Awaiting Council's 1st reading position" (OEIL 2023/0085(COD)). The EESC reports that the Commission withdrew it on 20 June 2025 because its requirements were considered too burdensome (EESC). The Parliament's file does not record a formal withdrawal. For now, Directive 2024/825 is the EU-wide standard in force.

3. Financial services: ESMA guidelines on fund names

These are the closest EU counterpart to the FCA rule. ESMA's Guidelines ESMA34-1592494965-657 (dated 21 August 2024) apply the rule that fund marketing must be "fair, clear and not misleading" to funds whose names use ESG terms (ESMA Guidelines):

• All such names: an 80% threshold of investments meeting the fund's environmental or social characteristics or sustainable objectives, plus exclusions under the Paris-aligned benchmark rules (Delegated Regulation 2020/1818).
• Names with "sustainable" terms: must also commit to invest meaningfully in sustainable investments as defined by SFDR.
• Names with "transition" or "impact" terms: the investments must be on a clear, measurable transition path or aim for measurable positive impact.
• Timing: new funds comply immediately; existing funds had six months from the application date.

US

1. Federal: FTC Act Section 5 and the Green Guides

• The legal basis: Section 5 prohibits deceptive acts or practices. A claim is deceptive if it is likely to mislead consumers acting reasonably and is material to their decision. Every reasonable reading of a claim must be truthful and backed before the claim is made, often by competent and reliable scientific evidence ^[2].
• Legal status of the Guides: they do not bind the FTC or the public. The FTC can still take action against claims that are inconsistent with them, but it must prove a Section 5 violation ^[11]. They do not override federal, state or local laws ^[21]. They cover B2B marketing and any medium, including logos and brand names ^[20].
• General principles (260.3):
  • qualifiers must be clear, prominent and placed close to the claim ^[24];
  • say whether a claim covers the product, the package or only part of either ^[18];
  • no overstated or negligible benefits ^[15];
  • comparisons must be clear and substantiated ^[19].
• Claim-specific guidance:

Claim	Key rule
General ("eco-friendly")	Don't make unqualified general claims; qualify them to specific benefits [12][25]
Carbon offsets	Use reliable methods and don't sell the same reduction twice [26]; disclose if the reduction is 2+ years away [27]; reductions the law already required can't be claimed
Certifications and seals	Seals that don't show their basis shouldn't be used [28]; certification doesn't remove the marketer's duty to substantiate [29]
Compostable	Qualify the claim if facilities aren't available to a substantial majority of consumers [30]
Degradable	Unqualified claims need complete decomposition within one year after customary disposal; deceptive for items that go to landfill [31]
Free-of / non-toxic	Can deceive even when literally true [32]; "non-toxic" implies safe for both people and the environment [33]
Recyclable	Unqualified only if facilities are available to at least 60% of consumers or communities [34]; otherwise qualify [35]
Recycled content	Partial content must be qualified by amount or percentage [36]
Renewable energy	A company that sells all its renewable energy certificates can't claim to use renewable energy [37]

2. States: California

• Business and Professions Code s.17580.5: makes any untruthful, deceptive or misleading environmental marketing claim unlawful, whether explicit or implied. It sits alongside the state's Unfair Competition Law (s.17200) and False Advertising Law (s.17500) (Senate Judiciary analysis). These make greenwashing directly unlawful under state law, not just guidance.

• SB 343 (Public Resources Code s.42355.51): bans the chasing-arrows symbol or any other recyclability indicator unless the producer can show the statutory criteria are met (CalRecycle). The material must be:

  • accepted by local recycling programs;
  • sorted into defined streams by large-volume processing facilities;
  • reclaimed consistently with the Basel Convention;
  • compliant with composition and design rules.

  Responsibility for the label sits with the producer. CalRecycle's study (final findings April 2025, to be revised in 2027) supplies collection and sorting data but does not decide whether any particular product is recyclable.

• AB 1305 (Voluntary Carbon Market Disclosures, Health and Safety Code s.44475 et seq.): companies making "net zero" or "carbon neutral" claims, or claims of significant emission reductions, must post on their website how each claim was determined to be accurate, how interim progress is measured, and whether a third party verified it. Companies that buy offsets must also disclose the seller, the registry, the project and the protocol. Disclosures must be updated at least annually. In the July 2023 version of the bill, the Attorney General and local prosecutors could seek up to $5,000 per day, capped at $500,000 (Senate Judiciary analysis). I couldn't confirm the penalty figure in the enacted text.

3. Pending at federal level

The FTC opened a review of the Green Guides in 2022. I couldn't open the Federal Register notice to confirm whether anything has been finalised.

How the three regimes differ

	EU	UK	US
Legal basis	UCPD as amended by 2024/825 (national laws)	DMCC Act 2024	FTC Act s.5, plus state laws
Blanket bans on generic and offset-based "neutral" claims	Yes	No, judged case by case	No; Guides advise qualifying claims
Detailed guidance	Directive text itself	Green Claims Code (guidance)	Green Guides (non-binding)
Recyclability threshold	None in 2024/825	None	60% (FTC); California's statutory criteria

I only checked California among US states. I can check other states, or how particular EU Member States have transposed 2024/825 and what fines they set, next.

Sources: Parliament procedure file 2023/0085(COD) · EESC on the Green Claims withdrawal · ESMA fund-names Guidelines · CalRecycle SB 343 Final Findings (April 2025) · California Senate Judiciary analysis of AB 1305