After retail giants Boohoo, Asos and George at Asda signed formal agreements to make changes to their green claims as a result of action from the CMA, Retail Week explores the significance of this move for fashion retail

Sustainable fashion illustration

Source: Eireen Z/iStock/Getty Images

According to the most recent data from Statista, £57.8bn was spent on clothing in the UK in 2022, with George at Asda and Boohoo generating revenue of more than £1.9bn and Asos posting sales of £3.5bn globally.

This week, Asos, Boohoo and George committed to changing the way they “display, describe and promote” their green credentials after an investigation by the Competition and Markets Authority (CMA), launched in July 2022, identified concerns about “possible greenwashing”.

CMA chief executive Sarah Cardell called the new commitments a “turning point for the industry”. Here, Retail Week looks at what changes customers can expect to see and what the significance is for the broader industry.

Changes for consumers

As a result of the pledge, customers can expect to see key information presented in “plain language, easy to read and clearly visible to shoppers”. Statements about materials must also be “specific and clear” rather than using ambiguous terms such as “eco” or “responsible”, which are often misinterpreted.

As well as using the correct imagery, product filters and clearly stating details of accreditation schemes, products must not be labelled as part of an environmental collection or edit unless it fulfils “all relevant criteria”.

All three retailers will be obliged to provide updates and reports to the CMA about their commitments and a spokesperson for George said it is “pleased to have mutually agreed” to the pledge in a bid to improve consumer understanding of environmental claims and guidelines for the future.

Business benefits

As part of its update, the CMA issued an open letter to the fashion retail industry to encourage other businesses to follow in Asos, Boohoo and George’s footsteps.

With sustainability being more important than ever, ESG compliance platform Compare Ethics chief executive Abbie Morris said the green pledge will benefit retailers just as much as consumers.

She said: “It’s imperative for companies to get ahead and check their claims now to mitigate the substantial risks looming ahead.

“Those that are able to align their operations with clear commitments to environmental and social responsibilities are more likely to expand their customer base, drive long-term profitability and protect themselves from regulations that would otherwise affect future trade.”

As sustainability continues to move up the list of priorities for customers, Morris believes Asos, Boohoo and George are likely to benefit in more ways than one from their pledge and improving transparency.

Sustainably significant

The announcement comes alongside broader discussions surrounding sustainability in the fashion industry, such as in France where a fast-fashion tax could be introduced by 2030.

GlobalData retail analyst Louise Déglise-Favre said while the CMA is in step with the wider crackdown on fast-fashion brands across Europe, its message also goes a step further and sets the bar for other fast-fashion players in the space.

“I think the message is really clear and gives the message that other businesses should look at what they’re doing,” she said. “It might encourage fashion businesses to be a bit more mindful of the green claims that they make.”

She added that it also lays out expectations for fast-fashion giants like Shein, which is eyeing a potential UK listing, and the standard that its competitors have set when it comes to sustainability efforts.

Despite this, law firm Charles Russell Speechlys associate Ilona Bateson points out that Asos, Boohoo and George do not have “particularly strong” sustainability credentials and it “remains to be seen” if other retailers will jump on the bandwagon.

The impact on Asos, Boohoo and George of the new commitments is likely to be substantial in terms of added red tape and work. It’s hard to see the wider fashion sector voluntarily signing up to similar commitments unless there is substantial pressure from the consumer. 

While the named retailers and the CMA will be hoping that shoppers will like the changes, it’s not a given. Up until now, fashion consumers have quite happily said one thing about sustainability and spent in another.