Asda, Asos and Boohoo must avoid ‘greenwashing’ after crackdown | Retail industry

Asda, Asos and Boohoo must avoid making misleading claims about the green credentials of their clothes in future, after a regulatory crackdown on “greenwashing” in the fashion sector.

The three retailers will have to file regular reports to the UK’s Competition and Markets Authority (CMA) after an investigation started in 2022 examined concerns that the companies were using vague claims to bolster their environmental credentials.

The global fashion industry is a major polluter and source of carbon emissions but consumers in wealthy countries are increasingly interested in shifting spending towards products that cause less environmental harm.

The UK competition regulator is concerned that shoppers are being misled by companies, who risk breaching consumer law in their efforts to appeal to green consumers.

In the first agreement of its kind, the three retailers have voluntarily committed to set out clearly what products qualify for eco ranges, not to use “natural” imagery such as green leaves to make a product look better than it is, and to give clear information on why fabrics count as “sustainable”.

The deal comes as Unilever, the owner of Dove and Marmite, is also being investigated over concerns that consumers are being misled by the company’s “green” claims on some essential household products.

MPs are considering a new law that would impose fines of up to 10% of a business’s worldwide turnover if they breach consumer regulations. On Wednesday the CMA published an open letter to the fashion industry making clear that the law, the digital markets, competition and consumers bill, would cover greenwashing claims.

Cecilia Parker Aranha, the CMA’s director of consumer protection, wrote: “Future action by enforcers, including in respect of misleading green claims, could […] result in the imposition of a penalty.”

Asda, owned by the billionaire brothers Mohsin and Zuber Issa, is the third-largest supermarket chain in the UK but also sells clothing in stores across the country. The undertaking it gave to the CMA covers its George at Asda clothing range.

Asos and Boohoo are online fashion stores listed on the London Stock Exchange that quickly rose to prominence as purveyors of fast fashion, with rapidly changing product lines to match consumers’ appetite for new trends. However, both have struggled in recent years after booming during the coronavirus pandemic lockdowns.

Asos’s largest shareholder is the Danish billionaire Anders Povlsen, who also owns Denmark’s Bestseller chain and has shares in the German fashion retailer Zalando. He is also Scotland’s largest landowner.

Boohoo Group, which owns the Debenhams, PrettyLittleThing, Oasis and Burton brands as well as its main label, was founded by Mahmud Kamani and Carol Kane. Boohoo has also sbeen criticised over its treatment of workers.

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Fast fashion has faced persistent criticism from environmental campaigners, who argue that the practice of buying cheap clothes and then rapidly casting them aside accelerates resource use, carbon emissions, and the amount of plastic waste.

An Asda spokesperson said: “We have proactively engaged with the CMA throughout this process and are pleased to have mutually agreed the voluntary undertakings. We support any measures aimed at improving consumers’ understanding of environmental claims and providing clear and consistent guidelines to the fashion industry as a whole regarding the future use of such claims.”

John Lyttle, Boohoo’s chief executive, said he was pleased to reach an agreement with the CMA and that the undertakings would “provide some helpful clarity”. He added: “We remain committed to working with others to find collective solutions to the shared challenges of sustainability within the fashion industry.”

Asos said it was “focused on developing robust processes and systems that will enable us to provide clear and accurate information about the environmental impacts of our products and our business”.

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