Fashion retailers ASOS and Boohoo are being investigated by the Competition and Markets Authority over their ‘green claims'.
Along with George at Asda, the three brands are being scrutinised about whether they misrepresented their sustainability criteria.
In a statement, the competition watchdog said: "Should we find these companies are using misleading eco-claims, we will not hesitate to take enforcement action - through the courts, if necessary."
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This is part of an ongoing investigation by the CMA launched back in 2020 looking into how products and services claiming to be 'eco-friendly' are being marketed, and whether consumers may be misled. As part of this campaign, it launched the ‘Green Claims Code' in 2021, outlining the six criteria companies need to fulfil to be considered "genuinely green".
At the start of this year, the government organisation turned its attention specifically on the fashion sector , saying it had "identified concerns around potentially misleading green claims".
"These included a number of companies creating the impression that their products were ‘sustainable' or better for the environment - for example by making broad claims about the use of recycled materials in new clothing - with little to no information about the basis for those claims or exactly which products they related to."
Regarding the investigation into ASOS, Boohoo and George at Asda, the CMA said it was examining whether "the statements and language used by the businesses are too broad and vague may create the impression that clothing collections […] are more environmentally sustainable than they actually are".
Online retailers ASOS and Boohoo both promote more ‘ethically' minded ranges on its websites -the ‘Responsible edit' from ASOS, Boohoo's current ‘Ready for the Future' - and Asda's clothing range boasts an in-store ‘George for Good' range.
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The CMA will also look at the criteria used to decide which products are included in these ranges. It said that "collections may be lower than customers might reasonably expect from their descriptions and overall presentation - for example, some products may contain as little as 20% recycled fabric".
Sarah Cardell, interim chief executive of the CMA, said that consumers who want to ‘buy green' should be able to do so without concerns that they are being misled.
"Eco-friendly and sustainable products can play a role in tackling climate change, but only if they are genuine," she explained.
"We will be scrutinising green claims from ASOS, Boohoo and George at Asda to see if they stack up. […] This is just the start of our work in this sector and all fashion companies should take note: look at your own practices and make sure they are in line with the law." The CMA added that as its enquiry continues it may "put additional firms under the microscope".
The CMA has contacted all three firms. ASOS released a statement today confirming it would be co-operating with the investigation, and is "committed to playing its part in making fashion more sustainable, including providing clear and accurate information about its products".
Boohoo told Investment Week that it had been "working closely with the CMA to understand their expectations and support them with their investigation. We have clear guidelines and a compliance process for our Ready for the Future ranges, to help us communicate these complex issues."
It added "our intention is to support our customers in making choices that are right for them and to do this we recognise that we need to provide them with straightforward and no-nonsense information.
"We hope that the outcome of the CMA's sector investigations provides all retailers with clear guidelines on what can and should be communicated. We are proud of the progress we have made and are of course happy to continue to work collaboratively with the CMA to understand how we can further improve."
Asda also responded, stating: "We know how important it is that our customers can trust the claims we make about our products, which is why we ensure the statements we make can be supported by industry accreditations. We are ready and willing to answer any questions the CMA have about our George for Good range and welcome further work by the CMA to ensure the sustainability claims made by the fashion industry as a whole are robust and clear."
