Britain to Investigate ASOS, Boohoo and Asda's Environmental Claims

A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. REUTERS/Dado Ruvic/Illustration
A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. REUTERS/Dado Ruvic/Illustration
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Britain to Investigate ASOS, Boohoo and Asda's Environmental Claims

A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. REUTERS/Dado Ruvic/Illustration
A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. REUTERS/Dado Ruvic/Illustration

Britain's competition regulator will investigate whether fashion brands ASOS, Boohoo and George at Asda are misleading shoppers with their environmental claims as it scrutinizes retailers for evidence of "greenwashing".

The investigation comes as regulators heighten scrutiny of companies which may be exaggerating their green credentials in an attempt to woo climate-conscious consumers as well as billions of dollars from environmentally-focused investor funds, Reuters said.

"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 labeled as environmentally friendly can contain as little as 20% recycled fabric, the CMA said.



Burberry Shows Early Signs of Recovery as 1st Quarter Sales Fall Less than Expected

FILE PHOTO: A Burberry store is seen in London, Britain, January 16, 2023.  REUTERS/Peter Nicholls/File Photo
FILE PHOTO: A Burberry store is seen in London, Britain, January 16, 2023. REUTERS/Peter Nicholls/File Photo
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Burberry Shows Early Signs of Recovery as 1st Quarter Sales Fall Less than Expected

FILE PHOTO: A Burberry store is seen in London, Britain, January 16, 2023.  REUTERS/Peter Nicholls/File Photo
FILE PHOTO: A Burberry store is seen in London, Britain, January 16, 2023. REUTERS/Peter Nicholls/File Photo

Burberry's retail sales fell by a less-than-expected 1% in the first quarter, it reported on Friday, in early signs of a recovery for the British luxury brand struggling with underperformance.

Shares in Burberry, which have more than doubled since September, rose 5% in early London trade.

Known for its trench coats and check pattern scarves, Burberry is using its British heritage designs to try to win back customers under the leadership of CEO Josh Schulman, who took over a year ago.

Comparable sales returned to growth in Europe, the company said, while trading in the Americas strengthened. Sales fell in China and in the rest of Asia, but the rate of decline was around half the level seen in the previous quarter.

"The improvement in our first-quarter comparable sales, strength in our core categories, and uptick in brand desirability give us conviction in the path ahead," Schulman said, adding that the autumn collection was being "well received".

Burberry has issued several profit warnings in recent years, and as part of its turnaround drive since Schulman took over, it plans to cut a fifth of its global workforce, a radical cost-cutting measure that investors have welcomed.

The 1% drop in overall comparable retail sales in the first quarter, which ended on June 28, beat analysts' forecasts for a 3% decline in a consensus provided by the company, and improved on a 6% fall in the previous quarter.

According to Reuters, analysts at Citi said the brand had reported its third consecutive quarter of like-for-like improvement since Schulman launched its new strategy last November, implying comparable sales could turn positive in the current quarter.

"In a quarter marked by further macro and geopolitical pressures and weaker tourist spending in Europe and Japan, Burberry has likely held up better than peers quarter-on-quarter," they said.