CMA Guidance on Green Credentials Strengthens Supply Chain Accountability

CMA issues fresh guidance on green claims across supply chains

On 22 January 2026, the Competition and Markets Authority published new guidance on environmental claims made across supply chains. The document, titled Making green claims: Getting it right across the supply chain, clarifies who is responsible when sustainability claims appear in marketing, packaging, or product information.

This is not a new law. However, it sharpens how existing consumer protection rules apply where several businesses contribute to a single product. That includes importers, manufacturers, brand owners, distributors, retailers, and even financial backers in some cases.

Many small and medium sized enterprises work within layered supply chains. You may rely on data from overseas suppliers, industry certifications, or marketing materials provided by a brand owner. The CMA is now making it clear that reliance does not remove responsibility.

The guidance builds on the Green Claims Code first issued in September 2021. That code set out general principles for making environmental claims that are truthful, clear, and evidence based. The new publication focuses on a practical question that many businesses have asked since then. When something goes wrong, who is accountable?

Regulatory scrutiny has increased over the past two years. Both the CMA and the Advertising Standards Authority have taken action against businesses accused of greenwashing. In December 2025, the ASA announced that a sweep of travel sector advertising had identified 213 potentially non compliant ads, including claims described as eco friendly without clear evidence.

Against that backdrop, the January 2026 guidance signals that enforcement will not be limited to headline brands. Any business involved in shaping, approving, or passing on environmental claims can be examined. For SMEs, that calls for closer attention to contracts, due diligence, and internal sign off processes.

How the January 2026 guidance clarifies roles and responsibilities

The CMA’s publication sets out four central principles. These principles explain how responsibility for environmental claims is shared across different actors in a supply chain.

First, responsibility may be shared but does not fall equally on everyone. The CMA states that liability depends on each party’s role, level of control, and degree of influence over the claim. A retailer that designs its own campaign carries a different risk profile from a wholesaler that simply passes on technical data.

Second, the CMA will take a risk based approach to enforcement. According to the authority, it will usually focus on the parties best placed to prevent or correct a misleading claim. In practice, that often means the business controlling the wording, placement, or presentation of the message.

Third, businesses are expected to carry out proportionate due diligence. What is proportionate will vary. A large multinational is likely to be expected to conduct deeper checks than a small distributor. That said, limited resources will not excuse a total absence of verification.

Finally, every environmental claim must be supported by up to date evidence. The Green Claims Code already required substantiation before publication. The new guidance reinforces the need for ongoing review. If circumstances change, for example a change in raw materials or manufacturing process, the claim must be reassessed.

The scope of the guidance is broad. It covers claims about sourcing, materials, production methods, recyclability, carbon impact, and overall environmental performance. It applies to statements on websites, in brochures, on product labels, and in digital marketing.

The CMA emphasises that compliance with consumer law is universal. As it states in the guidance, every business must ensure that it complies with consumer law and plays a part in ensuring consumers receive clear and accurate information on green claims. The full document is available on the CMA’s website.

The publication also links to the CMA’s Green Agreements Guidance, which explains how businesses can cooperate on sustainability initiatives without breaching competition law. That guidance recognises that joint environmental action can benefit consumers if structured lawfully.

This January release is the first cross sector update on green claims since 2021. It applies to all industries, from manufacturing and construction to retail, travel, food, and professional services.

Divergence from EU rules and growing disclosure pressure

The UK’s position on green claims is evolving alongside international developments. In November 2025, the European Union published guidance linked to its Empowering Consumers for the Green Transition Directive. That directive will apply from 27 September 2026.

Although the UK is no longer bound by EU consumer law, many British businesses sell into European markets or source from EU suppliers. Differences in wording, evidential standards, or permitted claims could create additional compliance work.

For example, EU rules increasingly restrict broad, unqualified environmental statements. Claims such as climate friendly or environmentally safe may face tighter scrutiny unless backed by recognised certification schemes or verified data. Businesses trading across borders must therefore track both UK and EU developments.

Meanwhile, domestic pressure is rising in parallel areas. The UK has consulted on expanding climate related financial disclosures. Larger companies and financial institutions already report in line with frameworks such as the Task Force on Climate related Financial Disclosures. Smaller firms may feel indirect pressure through lenders and supply chains.

Public enforcement activity reinforces that climate and environmental claims are not peripheral. The CMA now has stronger powers to impose penalties for breaches of consumer law. The Advertising Standards Authority continues to rule against misleading advertising. Details of its recent decisions can be found on the ASA website.

As a result, environmental marketing now sits firmly within mainstream compliance. It is no longer treated as aspirational branding. It carries legal and financial risk.

What this means for manufacturers, suppliers, and retailers

For SMEs, the practical implications are significant. Many businesses rely on supplier declarations or third party certifications when describing products. The CMA’s guidance makes it clear that reliance must be informed and reasonable.

If you manufacture products, you are expected to hold evidence about composition, testing, and provenance. That includes data on recycled content, carbon intensity, or sourcing standards. If raw materials change, you must consider whether existing claims remain accurate.

Transparency is also essential. If a product can only deliver environmental benefits under certain conditions, those conditions must be stated clearly. For example, a compostable product may require industrial composting facilities. Omitting that detail could mislead consumers.

Retailers and brand owners face their own duties. The guidance indicates that you cannot simply reproduce supplier claims without question. You should have processes to verify key statements and to request updated evidence where necessary.

In practice, that may involve:

• Documented supplier questionnaires focused on environmental attributes
• Contract clauses requiring prompt notification of changes
• Periodic audits or reviews of high risk product lines
• Clear internal approval processes before marketing is published

Distributors and wholesalers may assume their role is minor. However, if you adapt or translate marketing content, or if you present claims in new contexts, you may increase your level of responsibility. Control over presentation matters.

Financial consequences can be serious. Misleading environmental claims may lead to enforcement action, fines, corrective statements, or undertakings. There is also reputational damage, which can spread quickly online.

Furthermore, larger customers are tightening procurement standards. Increasingly, tenders require supporting evidence for carbon and sustainability claims. If your documentation is weak, you may lose out on contracts even before regulators become involved.

Insurance and lending arrangements add another layer. Some insurers scrutinise governance and compliance processes when assessing risk. Banks may request credible environmental data as part of lending decisions. Therefore, weak controls around green claims can have wider commercial effects.

For SMEs with limited compliance teams, the challenge lies in balancing proportionality with rigour. The CMA recognises that checks should reflect your size and capacity. However, absence of evidence is unlikely to be defensible if a claim proves misleading.

Ultimately, the guidance places sustainability messaging alongside financial and health and safety claims. It should be treated as core compliance, not marketing spin.

Core points from the CMA’s January 2026 publication

• The guidance was published on 22 January 2026 and applies across all sectors.
• It builds on the 2021 Green Claims Code and focuses on multi party supply chains.
• Responsibility depends on each business’s role, control, and influence over claims.
• The CMA will prioritise enforcement against those best placed to prevent or correct misleading statements.
• Due diligence must be proportionate but real, with documented checks where appropriate.
• All environmental claims require up to date, credible evidence before and after publication.
• Businesses trading into the EU must also consider the Empowering Consumers for the Green Transition Directive, effective from September 2026.
• Recent ASA investigations highlight the level of scrutiny in sectors such as travel and retail.

How SMEs can strengthen governance around environmental claims

From our experience advising UK SMEs, most problems arise from informal processes. A supplier sends a glossy data sheet. Marketing teams pick up a phrase such as sustainable or carbon neutral. Over time, the wording becomes bolder, while the underlying evidence remains thin.

The CMA’s guidance is a prompt to tighten those controls. You do not need a large compliance department. However, you do need clarity about who signs off environmental claims and what evidence they rely on.

Start by mapping where claims appear. That includes product packaging, websites, brochures, social media posts, and tender documents. List the specific environmental statements used, even if they seem minor.

Next, identify the source of evidence for each claim. Is it based on supplier data, an internal assessment, or third party certification? Check whether the evidence is current and whether assumptions are clearly recorded.

Where you depend on suppliers, contracts should require accurate information and prompt updates. Consider including audit rights for higher risk materials or products. These steps support both compliance and commercial transparency.

Training also matters. Sales and marketing colleagues should understand that environmental claims carry legal weight. They should know when to escalate questions rather than improvising answers to customers.

If you are unsure about your exposure, a structured compliance review can help. For example, our SBS support for carbon reporting compliance includes assessing the evidence behind public statements. We also advise on supplier engagement and data verification through our sustainable procurement advisory services.

The aim is not to deter you from making environmental improvements. On the contrary, accurate and well evidenced claims can strengthen customer trust. The CMA itself recognises that honest and carefully framed claims are legitimate.

However, clarity must come before ambition. If a claim depends on specific disposal methods or user behaviour, say so. If data is estimated, explain the basis. Precision reduces both regulatory and reputational risk.

Viewed practically, this guidance aligns environmental messaging with wider governance standards. Good record keeping, clear accountability, and regular review are already familiar in finance and health and safety. Sustainability now sits in the same category.

Further Reading

Businesses seeking detailed legal context should review the full CMA publication and the original Green Claims Code. Both are available via the government’s Green Claims Code page.

Those trading with EU customers should also examine materials linked to the Empowering Consumers for the Green Transition Directive on the European Commission’s website. This will help you identify areas of divergence before September 2026.

For advertising specific rulings and sector reviews, the Advertising Standards Authority publishes decisions and research updates at asa.org.uk. These case studies often provide practical insight into how regulators interpret broad environmental language.

By consulting these primary sources, you can assess your current claims against formal expectations rather than marketing convention. That approach supports informed decisions grounded in law, not assumption.

The direction of travel is clear. Environmental claims must be specific, evidence based, and kept under review. For UK SMEs embedded in complex supply chains, January 2026 marks a further step towards shared but carefully scrutinised accountability.