By Sachin Ravikumar
LONDON (Reuters) -Britain's competition regulator will investigate whether fashion brands ASOS (LON:ASOS), Boohoo and George at Asda are misleading shoppers with their environmental claims as it scrutinises retailers for evidence of "greenwashing".
The investigation comes as regulators heighten scrutiny of companies which may be exaggerating the their green credentials in an attempt to woo climate-conscious consumers as well as billions of dollars from environmentally-focused investor funds.
"People who want to 'buy green' should be able to do so confident that they aren't being misled," Competition and Markets Authority (CMA) interim Chief Executive Sarah Cardell said in a statement.
"Eco-friendly and sustainable products can play a role in tackling climate change, but only if they are genuine."
If the three companies are found to be misleading customers, the CMA will take enforcement action, including in court, if necessary, Cardell said, noting the probe was "just the start" of the CMA's work in the clothing sector.
The agency has outlined its concerns to the three companies and will begin gathering evidence, which will help it to decide whether there have been breaches of consumer protection laws.
It will examine whether the language used in marketing clothing, footwear or accessories is too vague and whether the criteria used by the companies to label products as sustainable might be lower than customers might reasonably expect.
Online fashion retailers ASOS and Boohoo said in separate statements they would work with the CMA and were committed to providing accurate information about their products.
Representatives for supermarket group Asda, which owns the clothing line George, did not immediately respond to requests for comment.
INVESTIGATING GREEN CLAIMS
The CMA's concerns come as the global fashion industry comes under increasing pressure to clean up its act.
The United Nations says the industry is the second biggest consumer of water globally, behind agriculture, and according to estimates, is responsible for up to 8% of carbon emissions.
Many regulators across the United States and Europe are cracking down on potentially false environmental, social and governance-related (ESG) claims made by companies across sectors as well as investor funds to make sure they are backed up.
The CMA last year published a green claims code, a set of guidelines for companies and shoppers to ensure that environmental claims are genuine and not misleading.
It will examine products in the fashion brands' eco ranges, where some labelled as environmentally friendly can contain as little as 20% recycled fabric, the CMA said.