Consumer products giant Unilever (ULVR) has found itself the unwelcome subject of a probe by the CMA (Competition and Markets Authority) into its ‘green’ claims on some of its household items such as cleaning products and toiletries.

However, with the shares already trading at 12-month lows the market’s reaction was fairly muted with the shares trading sideways at £37.80.

GREEN FINGERED

Under the Consumer Protection from Unfair Trading Regulations of 2008, which contain a general prohibition against unfair commercial practices and specific prohibitions against ‘misleading actions and omissions’, the CMA is examining Unilever’s claims its products are ‘green’ to make sure shoppers aren’t being misled.

At the start of this year, the CMA broadened its existing investigation into ‘greenwashing’ to include fast-moving consumer goods or FMCGs like food and drink, cleaning products, toiletries and personal care items.

This isn’t a small market – last year shoppers splashed out £140 billion on FMCGs according to the regulator, which says it is ‘concerned Unilever may be overstating how green certain products are through the use of vague and broad claims, unclear statements around recyclability, and 'natural' looking images and logos’.

Unilever products are under scrutiny for the company's 'green' claims / Image Source: Unilever

The CMA's list of concerns include whether:

·    certain statements and language used by Unilever appear vague and broad, and may mislead shoppers regarding the environmental impact of those products.

·    claims about some ingredients are presented in a way that may exaggerate how 'natural' the product is, and so may create an inaccurate or misleading impression.

·    claims focusing on a single aspect of a product may suggest it is environmentally friendly as a whole.

·    certain green claims - particularly in relation to recyclability - may be unclear, as they fail to specify whether they relate to all or part of a product, or packaging.

·    Unilever's use of colours and imagery - such as green leaves - may create the overall impression that some products are more environmentally friendly than they actually are.

‘Essentials like detergent, kitchen spray, and toiletries are the kinds of items you put in your supermarket basket every time you shop. More and more people are trying to do their bit to help protect the environment, but we're worried many are being misled by so-called 'green' products that aren't what they seem’ commented CMA chief executive Sarah Cardell.

‘So far, the evidence we've seen has raised concerns about how Unilever presents certain products as environmentally friendly. We'll be drilling down into these claims to see if they measure up. If we find they're greenwashing, we'll take action to make sure shoppers are protected.’

ROBUST RESPONSE

The consumer goods giant, which says its brands are ‘on a mission to create a better planet and society’, responded to the CMA probe saying it was ‘surprised and disappointed’ with the announcement and it refuted the suggestion its claims were in any way misleading.

‘Unilever is committed to making responsible claims about the benefits of our products on our packs and to these being transparent and clear, and we have robust processes in place to make sure any claims can be substantiated’, the firm added.

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