UK Competition Authority Signals Retailers Could Be Liable for Greenwashing Claims Passed Down the Supply Chain

The UK’s competition regulator has issued a clear warning to retailers and brands that responsibility for misleading environmental claims does not stop with manufacturers. The Competition and Markets Authority has published new guidance clarifying that businesses may be held liable for greenwashing even when they are simply repeating sustainability claims made by suppliers elsewhere in the value chain.

The guidance responds to growing concern from companies across multiple sectors seeking clarity on how far their legal obligations extend when marketing products with environmental credentials. It builds on the CMA’s Green Claims Code, first released in 2021, which set out consumer law principles governing eco-friendly claims.

 

Shared Responsibility for Environmental Claims

 

At the core of the guidance is the principle that responsibility for green claims is shared across the supply chain. The CMA stated that a business can be considered to be repeating an environmental claim simply by stocking or selling a product. If a manufacturer labels a product as environmentally friendly and that claim is false or misleading, both the manufacturer and the retailer may be exposed to liability for unfair commercial practices.

The regulator emphasised that this applies even when businesses are passing on information provided by others. Companies are therefore expected to take active steps to ensure that any environmental claims they make, directly or indirectly, are accurate and not misleading.

 

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Verification and Evidence as a Legal Requirement

 

The guidance makes clear that green claims must be supported by credible evidence. While acknowledging that obtaining detailed information from suppliers can be challenging, the CMA said that difficulty does not remove legal responsibility. Where verification is not possible, businesses are expected to reconsider how they frame claims, or whether those claims should be made at all.

The regulator went further, warning that if a supplier is unwilling or unable to substantiate a claim, retailers may need to reassess their commercial relationship with that supplier for the product in question, given the legal risk involved.

 

Enforcement Priorities and Mitigating Factors

 

Although the CMA reiterated that liability can extend across the supply chain, it also outlined how it will approach enforcement decisions. When prioritising cases and determining who to pursue, the regulator said it would consider which businesses were directly involved in making or promoting the claim, as well as the nature of their role in the commercial practice.

Genuine efforts to comply with the law may be treated as a mitigating factor when assessing penalties. However, the CMA said it would take a particularly serious view of cases where companies lack internal processes to verify environmental claims, or where existing guidance has already made legal obligations clear.

Practices may be considered especially egregious if businesses fail to follow their own compliance procedures, or continue questionable claims despite previous regulatory action or published guidance.

 

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Practical Expectations for Retailers and Suppliers

 

To support compliance, the guidance includes practical checklists tailored to different parts of the supply chain. Retailers are encouraged to request evidence from suppliers before advertising or selling products, seek confirmation that claims are supported by proof, and review environmental claims on a regular basis.

Suppliers and manufacturers, in turn, are expected to provide retailers with verifiable assurance, such as documentation on product composition, testing results, or evidence of independent verification. The CMA also cautioned suppliers against making casual or vague environmental statements that could be interpreted by consumers as verifiable claims.

 

Implications for Businesses and ESG Governance

 

The guidance signals a tougher stance on greenwashing enforcement in the UK, particularly as sustainability claims become more central to marketing strategies. For retailers and brand owners, it raises the bar on supply chain due diligence, shifting environmental claims from a marketing consideration to a governance and legal risk issue.

As regulators and consumers scrutinise sustainability messaging more closely, the CMA’s position reinforces that transparency and evidence are no longer optional. Businesses that fail to embed verification processes across their supply chains risk not only reputational damage, but direct regulatory exposure, even when misleading claims originate upstream.