UK antitrust regulator probes Unilever’s green claims

The UK’s antitrust regulator is investigating “green claims made by the British arm of Unilever Plc,” saying it wants to ensure that consumers aren’t being misled by a company that has touted social responsibility as a selling point for goods ranging from shampoo to ice cream.

The maker of Dove soap and Cif cleaner may have been overstating the environmental qualities of certain products through the use of “vague and broad claims, unclear statements, and natural looking images and logos,” the Competition and Markets Authority said on Tuesday.

The action is part of a deeper investigation into so-called greenwashing by consumer goods companies.

Earlier this year, the CMA launched a review of a wide range of essential items used by people on a daily basis and repurchased regularly, such as food and drink, cleaning products, toiletries, and personal care items.

Unilever said it was surprised and disappointed by the CMA’s investigation and denied that its claims were in any way misleading. The Anglo-Dutch company said it only makes responsible, transparent, and clear claims about the benefits of its products and has “robust processes in place to make sure any claims can be substantiated.” It added that it provides shoppers with information on how to dispose of its packaging. The company said it will cooperate fully with the CMA review.

Shares were largely flat when the market opened in London, having fallen nearly 10 percent since the start of the year.

Social purpose

Unilever has previously been accused of prioritizing a politically-correct image over the success of its business. Investor Terry Smith said in 2022 that a company that feels that mayonnaise needs a “purpose has “clearly lost the plot.”

Former boss Alan Jope had said that all Unilever’s brands should have a social purpose, a policy rowed back on by current CEO Hein Schumacher.

The CMA probe will be a further challenge for Schumacher as he attempts to turn around a group whose performance has underwhelmed in recent years.

The regulator said it’s contacted Unilever and will set out the concerns in writing. Some of the more specific concerns it has about the way Unilever packages and markets products include claims about some ingredients that may exaggerate how “natural the product is.” It is also looking at statements that focus on a single aspect of a product and suggest it is environmentally-friendly as a whole.

Assertions about the “recyclability of products and the use of images such as green leaves to make a product seem more natural” are also to be examined.

Possible outcomes of the CMA probe could include securing undertakings from Unilever that commit the firm to change the way it operates or potentially even taking it to court.