The UK’s competition watchdog has warned businesses that they have until the beginning of next year to make sure their environmental claims comply with the law.

The move comes as the Competition and Markets Authority (CMA) publishes a new ‘Green Claims Code’ to help companies abide by the rules.

Following an initial bedding-in period, the CMA will carry out a full review of misleading green claims early next year.

The organisation said that it “stands ready to take action against offending firms.”

The new code is part of a wider awareness campaign which the authority launched on Monday ahead of COP26.

The regulator is concerned about people being misled by environmental claims and explained that it wants to ensure that businesses feel confident navigating the law in this area.

The CMA will prioritise which sectors to review in the next few months, but it said that these could include industries where consumers appear most concerned about misleading claims, like textiles and fashion, travel and transport, and fast-moving consumer goods including food and beverages, beauty products and cleaning products.

“ We’re concerned that too many businesses are falsely taking credit for being green, while genuinely eco-friendly firms don’t get the recognition they deserve,” said Andrea Coscelli, chief executive of the CMA. “The Green Claims Code has been written for all businesses – from fashion giants and supermarket chains to local shops.

“Any business that fails to comply with the law risks damaging its reputation with customers and could face action from the CMA.”

The minister for energy and clean growth Greg Hands said that while millions of UK households are choosing to switch to green products, it is only right that this commitment is “backed up” by transparent claims from businesses.

“The competition regulator’s new code will help to ensure this with advice on how best to communicate and understand environmental claims,” he added. “Government is also currently reviewing green energy tariffs to ensure consumers can be confident they are choosing companies that make a conscious choice to invest in renewable energy.”

Last year, the CMA found that 40 per cent of green claims made online could be misleading, meaning that thousands of UK retailers and other businesses could be breaking the law.

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