Newcastle uni student Joanna Makriyiannis discusses greenwashing regulation in the UK and its impact on businesses
Greenwashing refers to practices by which companies mislead consumers, investors, or the public into believing that their products, operations, or policies are more environmentally friendly than they truly are. It typically involves exaggerated, vague, or false claims about sustainability, often designed to capitalise on the growing demand for ethical and eco-friendly business conduct.
In recent years, organisations have faced increasing pressure from investors, regulators, and consumers to adopt environmental, social, and governance (ESG) standards. While this had led to positive developments in corporate responsibility, it has also created incentives for superficial or deceptive behavior. In response, UK regulators have begun to scrutinise environmental marketing claims more rigorously.
This article explores the current and emerging legal frameworks in the UK that seek to prevent greenwashing, including the role of the Competition and Markets Authority (CMA), the Advertising Standards Authority (ASA), and the Financial Conduct Authority (FCA). It will assess the implications of recent legislative developments, most notably the Digital Markets, Competition and Consumers Act 2024 (DMCC) and examine the challenges businesses face in ensuring legal compliance with increasingly strict environmental standards.
Overview of the UK legal framework on greenwashing
The UK does not currently have a standalone anti-greenwashing law. Instead, a developing legal and regulatory framework has emerged to govern misleading environmental claims. Key components of this framework include the Competition and Markets Authority (CMA)’s Green Claims Code, the Digital Markets, Competition and Consumers Act 2024 (DMCC) and the Financial Conduct Authority (FCA)’s anti-greenwashing rule, introduced under its Sustainability Disclosure requirements (SDR).
The CMA Green Claims code, published in September 2021, is a central piece of guidance, intended to help businesses comply with existing consumer protection laws, particularly the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The code sets out six core principles; that environmental claims must be truthful and accurate, be clear and unambiguous, not omit or hide important information, make fair and meaningful comparisons, consider the full lifecycle of the product or service, and be substantiated with credible, up-to-date evidence. While the code itself is not legally binding, it has become an influential benchmark for assessing compliance with consumer law.
Regulatory enforcement has been significantly strengthened under the DMCC, which came into force in April 2025. The Act empowers the CMA to directly impose fines of up to 10% of a company’s global turnover without needing to initiate court proceedings. This marks a major shift from the CMA’s historically softer approach, that relied primarily on guidance and reputational consequences. The CMA has also issued sector-specific compliance advice, including guidance directed at major fashion retailers, warning against the use of vague or unsubstantiated eco-friendly marketing terms.
The Advertising Standards Authority (ASA) also plays a crucial role in tackling greenwashing in advertising. As the UK’s independent regulator of advertising across media, the ASA has previously upheld complaints against companies such as Ryanair and Asos, finding their sustainability-related advertising to be misleading. The combined enforcement efforts of the CMA and ASA signal a more coordinated regulatory approach to greenwashing in the UK.
What’s next? Future directions in greenwashing regulation
While the UK’s regulatory framework addressing greenwashing has significantly evolved in recent years, further developments are anticipated, driven by both international influence and growing domestic momentum for stricter enforcement.
One major external influence is the European Union’s proposed Green Claims Directive, which requires businesses to substantiate environmental claims using detailed scientific evidence and introduces a pre-approval process for eco-labels. Although the UK is no longer bound by EU legislation post-Brexit, regulatory alignment remains commercially and politically strategic, particularly for UK businesses that operate across European markets. The EU’s more rigorous approach may act as a de facto standard, pushing UK regulators to tighten domestic requirements in response.
Want to write for the Legal Cheek Journal?
Find out moreDomestically, political appetite for stricter regulation is also growing, as climate change and ESG concerns become more prominent in public and policy discourse. The recent expansion of the CMA’s enforcement powers under the DMCC 2024, along with the FCA’s new anti-greenwashing rule introduced under its Sustainability Disclosure Requirements, reflect the UK government’s recognition of the need for stronger deterrents. Some legal commentators have even suggested further reforms, including the formal codification of the Green Claims Code into statute or the introduction of criminal sanctions for repeated or egregious breaches.
Together, these developments suggest that the UK’s regulatory approach to greenwashing will continue to intensify, shaped by a combination of external regulatory trends, and internal political will aimed at ensuring environmental claims are accurate, evidence-based, and legally accountable.
Navigating legal risk: the compliance burden on businesses
Given the rapidly evolving legal framework, businesses are increasingly exposed to significant compliance challenges under emerging anti-greenwashing regulations. A central difficulty lies in verifying environmental claims across complex, global supply chains. Regulatory instruments such as the CMA’s Green Claims Code and the FCA’s anti-greenwashing rule require that sustainability claims be clear, truthful, and substantiated by credible, up-to-date evidence. This imposes a considerable evidentiary and operational burden on companies, who must implement systems capable of tracing raw materials, production methods, and carbon emissions throughout the supply chain. This is especially challenging in sectors such as fashion, electronics, and food, where operations span multiple jurisdictions with inconsistent environmental reporting standards.
Moreover, the financial and logistical costs of compliance, including third-party audits, certification processes, and ongoing supply chain monitoring can be particularly onerous for small enterprises. However, non-compliance carries growing risks. Beyond regulatory liability, companies face reputational damage if accused of greenwashing. Investors, regulators, and increasingly conscious consumers are scrutinizing environmental claims more rigorously, and the proliferation of social media means any inconsistencies can be rapidly exposed and widely disseminated.
Legally, misleading sustainability claims may trigger investigations and enforcement actions, particularly under strengthened regimes such as the Digital Markets, Competition and Consumers act 2024, that enables the CMA to impose fines of up to 10% of a company’s global turnover. In some cases, consumer protection law allows for enforcement even without proof of reliance or harm. In others, such as under sections 90 and 90A of the Financial Services and Markets Act, claimants must demonstrate reliance on the misrepresentation and consequent loss. As regulatory scrutiny intensifies and legal thresholds evolve, businesses must adopt a risk-averse approach by ensuring all environmental claims are accurate, evidence-based, and transparently communicated.
Conclusion: Green claims, real consequences
Therefore, greenwashing is no longer just a reputational issue. It now carries serious legal and financial risks. With stronger enforcement powers under the DMCC Act and new rules from the FCA, UK regulators are now stepping up efforts to hold businesses accountable for misleading environmental claims. As regulatory expectations rise, companies must ensure that all green claims are accurate, transparent, and properly evidenced. In this shifting landscape, proactive compliance is thus essential.
Joanna Makriyiannis is an incoming second-year LLB student at the University of Newcastle with a strong interest in commercial law and how it intersects with business and sustainability. She is curious about how legal frameworks evolve in response to real-world challenges and enjoys exploring these ideas through writing and discussion.
The Legal Cheek Journal is sponsored by LPC Law.
