www.managedITmag.co.uk 29 ensure data flows up the supply chain. If relying on third parties for information, it remains the company’s responsibility to verify accuracy. The Green Claims Code’s six core principles remain the benchmark to operate against – claims must be truthful and accurate, clear and unambiguous, not omit important information, make fair and meaningful comparisons, consider the full lifecycle and be substantiated with robust evidence. Protecting against a dual threat While greenwashing may not be a fundamentally new issue, the enforcement landscape and risk has changed. Tech companies promoting AI or other digital tools as environmentally friendly now face dual risks: civil enforcement for misleading claims and potential criminal prosecution if fraud prevention procedures are inadequate. Against that backdrop, it’s never been more important for environmental claims to be accurate, clear, substantiated and to consider full lifecycle impact. Robust compliance systems that take account of CMA expectations regarding working with the supply chain must also be in place and clearly evidenceable. The silver lining is that this more stringent regime will likely benefit ethical and principled brands that do their compliance properly by cracking down on those trying to gain an advantage through inaccurate and unfair claims. https://www.mills-reeve.com authorities, unlimited fines and the severe reputational damage that accompanies criminal conviction. The only defence is proving that ‘reasonable procedures’ were in place to attempt to prevent fraud. It is worth noting that greenwashing resulting from accidental overstatement of sustainability achievements would, most likely, fail to meet the ‘dishonesty’ threshold needed to establish fraud by false representation. However, that distinction offers cold comfort for organisations facing investigation. How should tech companies react? The government guidance sets out six principles for a fraud prevention framework, including top-level commitment from leadership, regular risk assessments, proportionate procedures, thorough due diligence, staff training and ongoing monitoring. For environmental claims specifically, businesses making the claims are responsible for gathering the evidence needed from the entire supply chain. The CMA’s recent guidance emphasises that businesses across the supply chain must support these efforts to ensure that environmental claims are accurate, whether made directly, indirectly or by passing information up the chain, so that information given to consumers about environmental credentials is accurate and not misleading. In practice, this means tech companies should conduct annual checks, spot checks and promoting consumer trust and confidence, while deterring poor corporate practices”. Demonstrating its intent to use its powers actively, the CMA has already issued Euro Car Parks with a fine of £473k, 75% of the maximum fixed penalty available, and opened consumer enforcement investigations against three companies around their presentation of mandatory fees. The criminal dimension Compounding the regulatory enforcement challenge, FTPF (failure to prevent fraud) provisions could see greenwashing prosecuted as a criminal offence. In broad terms, the offence applies to organisations meeting two or more of the following criteria: over 250 employees, more than £18 million in total assets, or more than £36 million turnover. Two specified fraud offences are particularly pertinent to greenwashing: fraud by false representation and fraud by failing to disclose information. These could encompass green claims relating to environmental impact and materials used in production. The government guidance on FTPF even provides an example involving greenwashing – an investment fund provider promoting an investment in a ‘sustainable’ timber company despite knowing the credentials are fabricated. Previously, such cases would fall solely under regulatory scrutiny. Now, organisations face potential investigation by the Serious Fraud Office and/or other SUSTAINABILITY Econocom in Top 1% for ESG Econocom, a provider of workplace, AV and infrastructure solutions, managed services and technology financing, has been awarded the EcoVadis Platinum Medal, the highest distinction granted by the ESG ratings provider. This puts Econocom in the top 1% of 150,000 companies assessed by EcoVadis globally and follows several years of structured commitment to environmental, social and governance issues as part of the Group’s ‘One Econocom’ strategic plan. Angel Benguigui, CEO of Econocom, said: “Receiving the EcoVadis Platinum Medal is recognition of a long-term commitment to fully integrate environmental, social and ethical considerations into the heart of our business model. This ambition reflects a strong conviction: making sustainable performance a tangible driver of value for our clients, partners and all our stakeholders.” Econocom’s overall score of 88/100 was 12 points higher than its last assessment in 2024, when it achieved a Gold rating, reflecting continuous progress across the four pillars evaluated by EcoVadis: Environment (89/100), Social & Human Rights (89/100), Ethics (86/100) and Sustainable Procurement (86/100). www.econocom.co.uk
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