The CMA's new Green Claims Code requires all environmental claims to be truthful, unambiguous and transparent. It also compels organisations to include all relevant information relating to a claim.
Failure to adhere to the code could mean court proceedings. In some cases, businesses may be required to pay redress to any consumers harmed by the breach.
The Code has been developed in response to increasing consumer demand for products and services that protect the environment.
PRCA Climate Misinformation Strategy Group chair John Brown said: "In our own recent research we found that over half the British public feel as though they've been misled when it comes to the climate crisis discussion, particularly with content on social media. So we welcome the news that the CMA is cracking down on greenwashing and baseless sustainability claims.
"It's about time every organisation in the UK moves away from dubious intent and towards positive action and proof. By embracing transparency and ensuring claims are backed by credible verification, brands can work fearlessly to help address one of the biggest challenges facing our world."