United Kingdom

Consumer Law and Climate Change

Contents

    This section was last reviewed in January 2025.


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    Introduction

    Many consumers prefer products and services which minimise negative impacts, or have a positive impact, on the environment. By highlighting environmental attributes, for example through using labels such as ‘environmentally friendly’, ‘green’, or ‘sustainable’, businesses can therefore gain a competitive advantage. Shifting consumer sentiment can play an important role in the net zero transition, however it has also created an opportunity for businesses to make false or misleading environmental claims in order to benefit from this sentiment without taking appropriate climate action. Consumer law, which has long aimed to address misleading business practices, is therefore an important mechanism for holding businesses to account.

    • Existing consumer law frameworks aim to address misleading claims, so climate change will not necessarily alter fundamental consumer law principles or legislation.
    • In response to the rise in greenwashing, the CMA and ASA have each issued guidance to clarify how companies should make environmental claims in line with consumer law.
    • Both the CMA and the ASA have investigated and remedied instances of greenwashing in multiple sectors.
    • Similar trends have emerged in other jurisdictions as regulators and litigants seek to use consumer law to address misleading environmental claims, which may impact UK companies.
    Key Legislation
    Consumer Protection Act 1987

    Consumer Rights Act 2015

    Consumer Protection from Unfair Trading Regulations 2008

    How climate change is impacting consumer law

    The main area where consumer law intersects with climate change is in the way which it can address misleading environmental claims, or ‘greenwashing’. As consumers increasingly express a preference for products and services with a better impact on the climate, greenwashing has become more common. Environmental claims have, in turn, come under increasing scrutiny. Greenwashing is a multifaceted issue. Planet Tracker, a sustainable finance think tank, has conceptualised different manifestations of greenwashing in its ‘Greenwashing Hydra’. Companies can misrepresent their environmental credentials in many ways, however what Planet Tracker calls ‘greenlabelling’, where products or services are purported to be more environmentally friendly than they actually are, is the most clearly relevant to consumer law.

    Consumer law has not needed to undergo significant transformations to address greenwashing. One of consumer law’s key functions is to prevent misleading information, which is evident in broad consumer legislation such as the Consumer Rights Act 1987, the Consumer Rights Act 2015,  and the Consumer Protection from Unfair Trading Regulations 2008. Regulators, in particular the Competition and Markets Authority (CMA) and the Advertising Standards Authority (ASA) implement and enforce these rules and have therefore had to respond to a rise in greenwashing. The CMA has issued its Green Claims Code to clarify issues which might arise out of environmental representations, and the ASA has published guidance on environmental claims.

    Overall, climate change has not fundamentally changed consumer law but has had important implications for its application. It is also important to note that not all greenwashing cases are brought under consumer law – in particular, greenwashing has also had implications for financial law and tort law.[1] Greenwashing claims may also invoke human rights law,[2] breach of contract,[3] and even OECD guidelines.

    The broader implications of climate change may also span beyond greenwashing, as new sustainable products and technologies could face challenges separate from their environmental regulations. Finally, many businesses in the UK may also be impacted by consumer regulation against misleading environmental claims abroad. In this regard, the EU is an important jurisdiction – the European Parliament has adopted specific legislation which aims to tackle misleading environmental claims.[4]

    How consumer law can help to address climate change

    Mitigating greenwashing will help to address climate change by ensuring that businesses back their environmental claims with real action, and by giving consumers confidence when factoring environmental criteria into their choices. By enforcing the legislation and guidance listed above, consumer law can therefore play a positive role in the fight against climate change. Both litigation and regulatory enforcement can be avenues to achieving this.

    The LSE Grantham Institute conducted an international analysis of ‘climate-washing’ litigation, showing a stark increase in these types of claims from 2016-2023.[5] Perhaps most importantly, claimants were successful in most of these cases – which stands in contrast to climate litigation as a whole, which has tended to be unsuccessful. This indicates that consumer law may be a particularly effective lever for achieving climate goals. One example of greenwashing litigation is claims related to the ‘Dieselgate’ scandal, which involved misleading environmental representations about vehicle emissions.[6] However, these cases were not brought under consumer legislation. Instead of private litigation, most climate-related consumer law claims are addressed through regulatory enforcement. In certain circumstances this may have advantages due to lower barriers to bringing an action.  

    The CMA has acted to enforce its Green Claims Code. This has included a review of environmental claims from fashion retailers. The CMA subsequently launched a formal investigation into major retailers, eventually securing commitments from ASOS, Boohoo and ASDA.[7] The CMA has also reviewed companies in the fast-moving consumer goods sector and contacted Unilever to secure undertakings.[8] Investigations have targeted other industries, including heating and insulation.

    The ASA has also acted. Most notably, it issued a ruling against Oatly for encouraging consumers to ‘Reduce. Re-use. Recycle’ despite not having shown an environmental benefit to its products.[9] Advertising from HSBC has also faced scrutiny from the ASA, when it ruled that advertisements describing the firm’s environmental credentials were misleading given it finances fossil fuel development.[10] These rulings have faced some criticism and confusion given that they scrutinise organisations’ broader conduct rather than specific product qualities, which underlines the importance of consulting ASA guidance before making climate-related claims.[11]

    UK businesses may also need to consider the stance of foreign regulators and the potential for litigation in different jurisdictions. For example, there has been greenwashing litigation against European energy companies on consumer law grounds.[12] Australia has also seen multiple instances of litigation on similar grounds.[13] These different national frameworks, and the breadth of legal areas under which greenwashing claims can be brought, have led to some efforts towards standardisation of rules surround green claims.[14]


    [1] ‘Greenwashing – Legal Risks and Opportunities’ (2024). Centre for Climate Engagement. Link.

    [2] See e.g., Comissão Pastoral da Terra and Notre Affaire à Tous v. BNP Paribas (2023)

    [3] ‘Greenwashing: some thoughts on future claims under English law’, Essex Court Chambers, Richard Hoyle and Jackie McArthur (2023). Link

    [4] ‘Green Claims’ European Union (2024). Link.

    [5] ‘Climate-washing litigation: towards greater corporate accountability?’ Juliana Vélez-Echeverri, Catherine Higham and Joana Setzer. Link.

    [6] ‘£193 Million Volkswagen Dieselgate Emissions Settlement’ Leigh Day (2022). Link.

    [7] ‘Fashion Greenwashing: Investigation into ASOS, Boohoo and ASDA’ Competition and Markets Authority (2024). Link.

    [8] ‘United Kingdom – Sustainability Claims and Greenwashing’ CMS (2022). Link.

    [9] ASA Ruling on Oatly UK Ltd t/a Oatly (2022).

    [10] CMS at n 8.

    [11] Ibid.

    [12] Greenpeace France and Others v. TotalEnergies SE and TotalEnergies Electricité et Gaz France (2022)

    [13] See, < https://climatecasechart.com/non-us-jurisdiction/australian-competition-and-consumer-commission/>.

    [14] Centre for Climate Engagement at n 1.