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Greenwashing is no longer a low-risk gamble. With the Advertising Standards Authority (ASA) using AI monitoring to detect misleading adverts, enforcement is now proactive. Brands can no longer rely on ambiguity or assume claims will go unnoticed. The key to staying compliant – and competitive – is precise messaging, transparency and robust evidence. This article explores what this means for your business and how to stay ahead of the ASA’s increasingly sophisticated enforcement.
Introduction
Greenwashing happens when businesses exaggerate or misrepresent their environmental credentials. The risks? Adverts that cross the line can breach ASA rules, leading to bans, wasted advertising spend, and damaged consumer trust.
The ASA is no longer waiting for complaints. It now uses AI-driven tools to proactively scan digital adverts for misleading claims. Statements that once slipped under the radar are being flagged and removed. Retailers, particularly in fashion, face heightened scrutiny because of the sector’s significant environmental footprint and history of vague sustainability promises.
At the same time, consumers are becoming more informed, and far less forgiving. Sustainability and ESG play an increasingly prominent role in consumer decision-making.
Transparency isn’t just about compliance; it is a competitive advantage. Brands that cannot substantiate claims risk regulatory action and reputational damage, while those that get it right can build loyalty and stand out in a crowded market.
Requirements for legal compliance
Under the ASA’s UK Advertising Code, businesses must ensure that environmental claims made in advertising are clear, accurate, and supported by robust evidence. Key rules include:
- Rule 11.1: The basis of environmental claims must be clear.
- Rule 11.3: Absolute claims (e.g., “sustainable” or “eco-friendly“) require a high level of substantiation.
- Rule 11.4: Claims should consider the full life cycle of the product unless the advert explicitly states otherwise and clearly defines the limits.
Recent ASA rulings against Nike, Superdry, and Lacoste illustrate the consequences of non-compliance. Each brand made broad statements such as “sustainable materials,” “sustainable style,” and “sustainable clothing” but failed to substantiate those claims with adequate evidence when asked to do so.
For example, Nike argued that its reference to “sustainable materials” was “framed in general terms” and intended to highlight that some products on its site included recycled materials. However, the ASA found this explanation insufficient because the broad claim needed to be qualified and it did not demonstrate how the advertised products met sustainability standards. Ultimately, Nike’s claim fell well below the high evidential threshold required for absolute environmental claims.
Similarly, Superdry and Lacoste’s adverts boasted “sustainable style” and “sustainable clothing” but were subsequently banned by the ASA after the brands failed to demonstrate that the advertised products had “no detrimental effect on the environment“.
These cases emphasise a critical point: generalised or vague sustainability messaging without clear, verifiable evidence is likely to breach the Code.
Risk for retailers and brands
Failing to comply with the ASA’s Code can expose businesses to serious legal, financial, and reputational risks.
Where a business continues to use a banned advert or if a complaint falls outside the ASA’s remit (e.g., influencer gifting), the ASA can escalate cases to the Competition Markets Authority (CMA). We saw the CMA do this with George at Asda, ASOS and Boohoo’s respective green claims because of the broader market implications.
In the CMA’s first investigation the fashion retailers had to give formal undertakings to use only accurate and clear green claims, provide regular compliance reports, and improve internal processes. The CMA provides a useful compliance checklist for businesses making a green claim: The Green Claims Code checklist – GOV.UK.
The ASA can also refer persistent breaches to Trading Standards. These actions can result in legal undertakings or injunctions, exposing businesses to costly compliance measures and adverse publicity.
Consumers are also paying closer attention to sustainability messaging and ESG statements, with exaggerated or unsubstantiated sustainability claims increasingly considered to be greenwashing by consumers, leading to distrust of the brands involved and their messaging. Research published in the University of Chicago’s leading business publication, the Chicago Booth Review, showed that businesses caught in ESG-related scandals can experience a 5-10% drop in consumer spending, with adverse effects lasting at least 6 months. Marketing teams must therefore ensure claims are robust and verifiable to avoid reputational fallout.
Practical guidance
The risks for businesses that fail to substantiate claims are clear, but good practices and organisation will ensure that claims can be made confidently. We recommend that businesses take the following practical steps:
- Ensure claims are specific, evidence-based, and verifiable. Precision in wording is essential to avoid breaching ASA rules. Broad or unqualified terms like “sustainable” or “eco-friendly” are rarely acceptable unless the claim covers the entire product life cycle, clearly states the scope of the claims and can be substantiated with evidence. Instead, use accurate, measurable language. For example, rather than describing a garment as “organic” when it only partially meets that standard, specify: “This t-shirt is made from 35% organic cotton“.
- Audit all marketing materials for environmental claims. Review existing and planned content to identify any sustainability statements and ensure they meet compliance standards. Keep a comprehensive record of what claims have been made and where they appear.
- Maintain a substantiation file. For every environmental claim, retain supporting evidence. Having this readily available will make it easier to respond quickly to ASA or CMA investigations and demonstrate compliance.
How Michelmores can help
Our Commercial & Regulatory Disputes team advises on regulatory issues enforced by the CMA and other regulators. If your business is facing an investigation, or anticipates one, we can provide strategic guidance to mitigate against disruption, protect reputation, and ensure compliance.
Please contact Nick Roberts, Iain Connor or Darcy Wilson if you want to discuss any of these issues. Alternatively, to learn more about our services, click here: Commercial & Regulatory Disputes.
You may also be interested in Iain Connor’s article on greenwashing in the food & beverage sector: Greenwashing: The risks of overstating environmental credentials.