LONDON — Unilever shares were broadly flat on Wednesday as the brand faces a formal investigation into alleged greenwashing by the Competition and Markets Authority in the U.K.
Shares in the consumer giant, owner of brands including Dove, Vaseline and Ben & Jerry’s, edged up 0.5 percent to close at 38.07 pounds on the London Stock Exchange, outpacing the modest growth of the overall FTSE 100 index.
The Competition and Markets Authority revealed this week that it would examine “green claims” by Unilever “to make sure shoppers are not being misled.”
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The CMA, which has been looking at other consumer goods companies, said it is concerned that Unilever “may be overstating how green certain products are through the use of vague and broad claims, unclear statements around recyclability and ‘natural’ looking images and logos.”
The CMA added that certain statements and language used by Unilever “appear vague and broad, and may mislead shoppers regarding the environmental impact of those products.”
It added that claims about some ingredients are presented in a way that may “exaggerate how ‘natural’ the product is, and so may create an inaccurate or misleading impression.”
The U.K. government organization also took aim at Unilever’s statements about products’ recyclability and the lack of specification as to whether all or part of a product, or packaging, could be repurposed.
Sarah Cardell, chief executive officer of the CMA, said that “more and more people are trying to do their bit to help protect the environment, but we’re worried many are being misled by so-called ‘green’ products that aren’t what they seem.
“So far, the evidence we’ve seen has raised concerns about how Unilever presents certain products as environmentally friendly. We’ll be drilling down into these claims to see if they measure up. If we find they’re greenwashing, we’ll take action to make sure shoppers are protected,” she added.
Unilever said it was “surprised and disappointed” with the CMA’s announcement, and refuted that its claims were in any way misleading.
“Unilever is committed to making responsible claims about the benefits of our products on our packs and to these being transparent and clear, and we have robust processes in place to make sure any claims can be substantiated,” the company said.
Unilever said it uses the On-Pack Recycling Label to provide consumers with information on how to dispose of its packaging after use. Unilever also noted that it is a founding signatory of the U.K. Plastics Pact, “which brings together the entire plastics packaging value chain to tackle the challenges around plastic waste.”
The company said it will continue to co-operate with the CMA “and fully comply with further requests for information.”
The CMA investigation comes in the wake of ongoing calls from consumers, stakeholders and media organizations for Unilever to cease trading in Russia in the wake of its war in Ukraine.
Unilever’s new CEO Hein Schumacher said in a statement in October that the company would continue to operate in Russia, albeit on a small scale with “minimal” economic contribution to the Russian state.
“I understand why there are calls for our company to leave the country and we continue to look at our options within a context that has become more complex following recent regulatory developments in Russia. We remain steadfast in our condemnation of the war in Ukraine,” Schumacher said in October.
Earlier this year before Schumacher took over, Unilever confirmed that since March 2022 it has ceased all imports and exports of its products into and out of Russia. It has also put an end to all media and advertising spend and capital flows into and out of the country.
At the same time, Unilever said it continues to supply everyday food and hygiene products made in Russia to people in the country.
“We understand why there are calls for Unilever to leave Russia. We also want to be clear that we are not trying to protect or manage our business in Russia. However, for companies like Unilever, which have a significant physical presence in the country, exiting is not straightforward,” the company said.
Unilever argues that it does not have many options in Russia. The company has said that closing down the business altogether would mean the loss of around 3,000 jobs, and a chance for the Russian state to take control of its operations.