How the UK’s Tougher Laws Are Holding Companies Accountable For Greenwashing

Writer: Faith Evans

Date Written: 28/01/2025

What is Greenwashing?

Greenwashing refers to the deceptive practice where companies market their products and services as environmentally friendly while continuing to engage in environmentally harmful activities. Many businesses falsely associate themselves with sustainability through branding—often using the colour green and eco-conscious messaging—to attract consumers who prioritise sustainability. This misleading practice is particularly effective, as 57% of British consumers are willing to pay more for environmentally friendly products. Additionally, 81% of consumers prefer their investments to provide financial returns while also supporting sustainability initiatives. However, without proper regulation, companies can exploit these preferences without making meaningful changes to their environmental impact.

Corporate Practices and Environmental Harm

Companies play a significant role in environmental degradation, with CO₂ emissions, fossil fuel extraction, and deforestation being major contributors. According to The Guardian, just 100 companies are responsible for 71% of global emissions. Among them, investor-owned giants such as Shell and BP have been identified as some of the highest contributors. Experts warn that if emissions continue at their current rate, the planet’s average temperature could rise by 4°C by the end of the century, leading to catastrophic consequences such as rising sea levels and extreme weather conditions.

Examples of Greenwashing

Many well-known companies have been caught misleading consumers about their environmental impact:

• McDonald's: The fast-food chain appeared to embrace sustainability by replacing plastic straws with paper alternatives. However, a 2019 study revealed that McDonald’s paper straws were not recyclable either, exposing the initiative as a misleading marketing tactic rather than a genuine environmental effort.

• Volkswagen: The car manufacturer faced controversy when it was discovered that its vehicles were fitted with devices that artificially reduced emissions during testing. This deception misled consumers into believing their cars were producing fewer emissions than they actually were, violating existing environmental regulations.

These cases demonstrate how companies manipulate eco-conscious messaging to appear sustainable while continuing harmful practices.

Existing Legislation Against Greenwashing

The UK has introduced various regulations to combat greenwashing:

• The Anti-Greenwashing Rule (May 2024): This rule aims to ensure that companies accurately market their products and services, preventing misleading sustainability claims.

• The Consumer Protection from Unfair Trading Regulations 2008 (CPRs): This legislation protects consumers from misleading trading practices and prohibits misinformation. It also grants consumers redress rights if they have been misled or subjected to aggressive sales tactics.

New Legislation to Crack Down on Greenwashing

Despite existing measures, many argue that the regulations are not strict enough to deter companies from engaging in greenwashing. To address this, the UK government has introduced new, more aggressive legislation to hold businesses accountable. From 2025, the Competition and Markets Authority (CMA) will have the power to impose financial penalties of up to £300,000 or 10% of a company’s global turnover, whichever is higher. These stricter consequences aim to prevent companies from profiting through deceptive environmental claims.

Additionally, the Financial Conduct Authority (FCA) has given businesses until 2 April 2025 to comply with and implement the new greenwashing rules.

Conclusion

The introduction of tougher greenwashing legislation highlights the UK government’s commitment to holding companies accountable for misleading sustainability claims. By enforcing stricter penalties and improving transparency, these new measures aim to protect consumers and drive genuine corporate responsibility in environmental practices.

References:

The Guardian (2017), ‘Guardian sustainable business’, The Guardian

Legislation.gov, ‘The business protection from Misleading Marketing Regulations 2008’

Legislation.gov, ‘The UK Greenwashing Rule 2024’

The Financial Conduct Authority (2024), ‘FCA confirms anti-greenwashing guidance and proposes extending sustainability framework’, The Financial Conduct Authority

Robinson. D (2022), ‘10 companies called out for Greenwashing’, Earth.ORG

NRDC (2023), ‘What is Greenwashing’, NRDC

Circular (2025), ‘How greenwashing regulations will change in 2025’, circular