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.



South African Fashion Retailer TFG Reports 4.6% Rise in Annual Profit

FILE PHOTO: A shopper walks past a Foschini store (owned by TFG) at a shopping center in Johannesburg, South Africa, November 11, 2022. REUTERS/Siphiwe Sibeko/File Photo
FILE PHOTO: A shopper walks past a Foschini store (owned by TFG) at a shopping center in Johannesburg, South Africa, November 11, 2022. REUTERS/Siphiwe Sibeko/File Photo
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South African Fashion Retailer TFG Reports 4.6% Rise in Annual Profit

FILE PHOTO: A shopper walks past a Foschini store (owned by TFG) at a shopping center in Johannesburg, South Africa, November 11, 2022. REUTERS/Siphiwe Sibeko/File Photo
FILE PHOTO: A shopper walks past a Foschini store (owned by TFG) at a shopping center in Johannesburg, South Africa, November 11, 2022. REUTERS/Siphiwe Sibeko/File Photo

South African fashion retailer TFG reported a 4.6% rise in annual earnings on Friday thanks to a rebound in sales in Africa in the second half of the year, store expansion and the acquisition of British chain White Stuff.

TFG, which also operates in Australia, said headline earnings per share rose to 10.15 rand ($0.57) in the year ended March 31, up from 9.707 rand. Gross profit was up 6.7% to a record 28.8 billion rand ($1.62 billion).

TFG Africa's sales rose 7% in the second half after falling 0.1% in the first half. For the full year, sales rose by 3.7%, Reuters said.

Group online sales now contribute 12% of total sales, driven by the "continued success of our Bash platform, which has reached profitability two years ahead of schedule - a very likely unique achievement in the South African retail space," TFG CEO Anthony Thunström said.

TFG's total group revenue rose by 4.1% to 62.6 billion rand for the year, while retail sales increased 3.6%, boosted by 8.7% sales growth in the second half after a 2% contraction in the first half, supported by store expansions across all territories and the acquisition of fashion and lifestyle retailer White Stuff in the UK.

In Britain, TFG's annual sales rose by 16.4% in pounds, following the acquisition, while TFG Australia continued to face difficult trading conditions, with sustained high inflation and interest rates impacting the consumer.

The retailer declared a final dividend of 230 cents per share.