Feeling the heat — Worcester Bosch greenwashing investigation concludes

3 September 2024

8 min read

Environmental, Regulatory & Professional Conduct, Retail & Leisure

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:

Labels or text stating that Worcester Bosch’s boilers could run on a blend of 20% hydrogen and natural gas, which may have given the impression that this was a special feature of Worcester Bosch boilers despite the fact that all boilers in the UK have been legally required to operate this way since the mid-1990s.
Information and messaging on the use of hydrogen for home heating in the UK — despite the fact that this isn’t currently available. Its introduction is potentially years away and is dependent on future government decisions.
Descriptions and information about the environmental benefits of ‘hydrogen-blend ready’ boilers which may have falsely suggested that these boilers would reduce a household’s carbon footprint.

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:

Not make any statements or otherwise give the impression that a consumer will reduce their carbon footprint or achieve an environmental benefit or improvement by having a Worcester Bosch boiler because it can run on a hydrogen blend. This includes not stating or giving the impression that only a Worcester Bosch boiler has the capability to operate with a hydrogen blend.
Not make any statements or otherwise give the impression that purchasing or having a Worcester Bosch boiler will prepare a consumer for the introduction of a hydrogen blend into the gas network that’s certain or inevitable in the near future.
Within 30 days of the undertakings amend, cease and withdraw any marketing that would breach the undertakings and confirm to the CMA that it has done so (including the steps that it has taken).
Within a set timetable, contact its networks of accredited installers and third-party retailers to inform them of the content and effect of the undertakings. The communications must include that any party which itself engages in commercial practices of the kinds described in the undertakings is liable to commit infringements of CPUT. The communications have to be first approved by the CMA and Worcester Bosch must report to the CMA on the number of installers and third-party retailers that the communication was sent to.
Monitor and record its compliance with the undertakings and provide the records to the CMA at any time on reasonable notice.
Provide an accurate and complete response to any question or request for information from the CMA within a reasonable deadline set by the CMA.

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:

Reviewing existing marketing to ensure that any green claims comply with law and guidance and removing or amending those that don’t.
Internal policies for the making of any new green claims, including ensuring that they’re reviewed and approved by legal and/or compliance teams before they’re made.
Training on making green claims, especially for marketing teams.

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.