Greenwashing and the CMA Green Claims Code: A UK Business Guide

Repeating a supplier's environmental claim on your own packaging or website used to feel like a low-risk shortcut — you didn't make the claim up, after all. Recent UK guidance has closed that gap: passing on someone else's unverified green claim is now treated as your own compliance risk, not theirs.

What the Green Claims Code actually requires

The CMA's Green Claims Code, in effect since 20 September 2021, sets out how environmental claims made to UK consumers have to be substantiated. It applies to any business — UK-based or overseas — advertising or selling products or services to UK consumers, including retailers, brands and online platforms. The Code rests on six core principles: claims must be truthful, clear and unambiguous, and complete, meaning no omission of information that would change how a reasonable consumer understands the claim. Comparisons with other products or previous versions must be fair and meaningful, claims must take account of a product's full lifecycle rather than just one flattering stage of it, and every claim needs to be substantiated with credible, verifiable evidence, not just plausible-sounding wording.

The 2026 shift: supply chain liability

The most significant recent development isn't a change to the original six principles — it's new CMA guidance, published 22 January 2026, that substantially expands who's exposed to enforcement risk. Under the original Code, primary liability sat mainly with whoever first made an environmental claim. The new supply chain guidance makes clear that retailers, brands and intermediaries can now face enforcement risk simply for repeating, relying on, or disseminating a third-party claim they didn't independently verify. The guidance imposes what amounts to an affirmative duty: businesses should be able to access sufficient information to verify a claim, and are expected to take reasonable steps to do so before passing it on.

"We didn't know" is no longer a safe harbour

One of the more consequential points in the 2026 guidance is that the CMA has explicitly confirmed innocent, good-faith breaches remain actionable. A retailer that genuinely believed a supplier's "carbon neutral" claim, without having verified it, can still face enforcement action for repeating that claim — good faith may reduce the eventual penalty, but it doesn't eliminate exposure in the first place. This is a meaningful shift from how many businesses assumed supply chain responsibility worked, and it puts pressure on procurement and marketing teams to build verification into the process rather than treating supplier claims as pre-cleared.

What enforcement actually looks like

Enforcement runs through the Consumer Protection from Unfair Trading Regulations 2008, and the financial exposure has grown substantially. Under the Digital Markets, Competition and Consumers Act 2024, fines can reach up to 10% of global turnover, with a minimum of £300,000, and daily penalties can apply for continued non-compliance. Beyond financial penalties, the CMA can require misleading advertising or products to be withdrawn from sale, and in the most serious cases, company officers can face criminal liability, including up to two years' imprisonment for unsubstantiated claims. Consumers can also pursue private legal action seeking damages or redress directly.

Where the CMA is focusing enforcement attention

The CMA has signalled particular scrutiny of transport, fashion, textiles, and fast-moving consumer goods — sectors where environmental claims are heavily used in marketing and where supply chains are often long and opaque. Within the 2026 guidance specifically, the CMA has flagged systemic governance failures, meaning an absence of any internal process for verifying claims before they're used, as a particular enforcement priority, alongside retailers and consumer-facing brands generally and businesses that refuse to provide substantiation when a supply chain partner asks for it.

Building a defensible verification process

Given the 2026 guidance, a defensible position now requires more than not making false claims directly. It means having an actual internal process for reviewing environmental claims — your own and any you plan to repeat from suppliers — against the Code's six principles before they're used, keeping records of the evidence relied on, and being able to demonstrate reasonable verification steps if a claim is challenged. Treating supplier-provided claims as automatically safe to repeat is exactly the assumption the new guidance was written to remove.

FAQ

Does the Green Claims Code apply to businesses outside the UK?
Yes, if they're advertising or selling to UK consumers, regardless of where the business itself is based.

Can a business be penalised for repeating someone else's environmental claim?
Yes. Under the CMA's January 2026 supply chain guidance, retailers and intermediaries can face enforcement risk for repeating or relying on unverified third-party claims, not only the business that originated the claim.

Does acting in good faith protect against enforcement?
Not fully. The CMA has confirmed that innocent breaches remain actionable, though genuine good-faith efforts may reduce the eventual penalty.

What are the maximum penalties for greenwashing under UK law?
Fines of up to 10% of global turnover, or a minimum of £300,000, under the Digital Markets, Competition and Consumers Act 2024, alongside possible daily penalties, product withdrawal, and in serious cases criminal liability for company officers.

The Green Claims Code's six principles haven't changed, but the 2026 supply chain guidance means far more businesses now carry direct exposure for claims they didn't originate. Learnsignal's guide to the EU Taxonomy Regulation covers a related framework for substantiating what counts as a genuinely sustainable activity. Browse our CPD courses to build ESG compliance awareness into your team's training.