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Feeling the heat — Worcester Bosch greenwashing investigation concludes

AuthorsRob Biddlecombe

Woman setting boiler

Worcester Bosch has been required to significantly alter its marketing practices following a greenwashing investigation by the Competition and Markets Authority (CMA).

Here, Partner and environmental law specialist Rob Biddlecombe explores the investigation and warns companies of new CMA powers that could result in greater sanctions in the future — with practical guidance on how to avoid greenwashing.

 

Achieving Net Zero — the CMA’s interest in the green heating and insulation sector 

According to the CMA, it’s estimated that the heating of homes accounts for approximately 17% of UK carbon emissions and that around 25 million households in the UK use fossil fuels, mostly for heating. 

It follows that switching to more sustainable home heating products — such as heat pumps, solar products and biomass boilers — and insulating homes will be essential to the UK achieving Net Zero by 2050, in-line with its commitment under the Climate Change Act 2008. To this end, governments in the UK have introduced policies to encourage the adoption of such products and insulation, including grant and funding schemes.

Nevertheless, take-up of more sustainable home heating products may be adversely affected unless consumers have trust and confidence in the claims that manufacturers make about them. In September 2022, the CMA launched a call for information looking at consumer protection in the UK green heating and insulation sector. In its subsequent report, the CMA identified several key concerns, including potential greenwashing by large businesses in the sector. 

 

The CMA’s investigation into Worcester Bosch’s green claims

In October 2023, the CMA announced that it was launching an investigation into Worcester Bosch regarding claims made about its so-called ‘hydrogen-blend ready’ home boilers.

In particular, the investigation looked at:

The CMA also wrote to 12 other businesses to warn them that they could be breaching consumer protection law after reviewing their marketing to consumers and to remind them of their legal obligations.

 

Unfair commercial practices — an imprisonable offence under law

The Consumer Protection from Unfair Trading Regulations 2008 (CPUT) prohibit ‘unfair commercial practices’ and these are defined at some length within the regulations. Engaging in unfair commercial practices is an offence for which the maximum penalty is an unlimited fine and/or (where an individual is convicted) two years’ imprisonment. 

In addition, where the offence is committed by a company or other corporate body and with the consent or connivance of an officer (i.e., a director, manager, secretary or other similar officer, or someone purporting to act in that capacity) or attributable to any neglect on that officer’s part, the officer will be guilty of the offence as well. 

 

Six principles of fair commercial practices in CMA’s Green Claims Code

In September 2021, the CMA published its guidance — the Green Claims Code — which sets out six principles that illustrate what amounts to unfair commercial practices in the context of green claims. It seems clear that the CMA had these principles in mind when investigating Worcester Bosch. 

One of the principles states that claims must be truthful and accurate. As part of the discussion around this principle, businesses are asked to consider whether they’re claiming environmental benefits that consumers would expect from a product or service anyway. Another principle states that claims should not omit or hide information and businesses are encouraged to consider whether they should caveat any claims or explain them in more detail. 

While the code doesn’t constitute law itself, it does represent a very useful indication as to the approach that the CMA (as a regulator under CPUT) takes when determining what constitutes unfair commercial practices. 

 

Undertakings secured by CMA for Worcester Bosch’s green claims

On 9 August 2024, Worcester Bosch signed undertakings to the CMA in relation to the marketing of its boilers. 

Among other things, the undertakings require Worcester Bosch to:

Undertakings were also secured from ASOS, Boohoo and George at Asda in March 2024 following the conclusion of the CMA’s investigation into green claims they’d made. 

While the CMA has closed its investigation, it has said that it will monitor compliance by Worcester Bosch in respect of the undertakings. Worcester Bosch doesn’t make any admission in the undertakings that any person has infringed the law, yet the undertakings are clearly onerous and impose an administrative burden on Worcester Bosch to comply with them.

 

Practical guidance to prevent greenwashing

Seemingly in anticipation of the undertakings, on 16 July the CMA published its final advice for businesses marketing green heating and insulation products. This provides sector-specific guidance on presenting price information and making product claims. 

This matter underlines the importance of understanding the risks associated with making green claims and the importance of putting in place processes to prevent greenwashing, including:

 

CMA’s new powers under the Digital Markets, Competition and Consumers Act 2024

Clearly, the outcome in this case has advantages for the CMA — Worcester Bosch has committed to ensuring that its green claims are lawful in future without the CMA having to incur the time, cost and effort in bringing a formal prosecution. However, the Digital Markets, Competition and Consumers Act 2024 gives the CMA the power to unilaterally impose a monetary penalty of up to £300,000 or — if higher — 10% of turnover where it’s satisfied that a business has engaged (or is engaging) in a breach of consumer protection law. 

When this power comes into force, it’ll significantly strengthen the CMA’s enforcement options and allow it to fine businesses for greenwashing without first going to court (although businesses will be able to appeal to a court against the imposition and/or amount of the fine). 

With such an option at its disposal, it’ll be interesting to see if the CMA will settle for undertakings from those that it investigates or choose to make an example of them by imposing heavy fines and send a clear signal to businesses at large not to engage in greenwashing.

 

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Rob Biddlecombe

Rob is a Partner in our property team.

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Rob Biddlecombe

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