Businesses falsely claiming environmental credentials could face sanctions, the UK's Competition and Markets Authority regulator said on Monday, due to concerns over "misleading green claims".

The CMA said it was conducting a full review into the issue from early next year, and warned businesses they had until then to comply with the law.

"We're concerned that too many businesses are falsely taking credit for being green, while genuinely eco-friendly firms don't get the recognition they deserve," CMA chief executive Andrea Coscelli said.

"Any business that fails to comply with the law risks damaging its reputation with customers and could face action from the CMA."

To protect consumers and aid business, the CMA published the "Green Claims Code" ahead of the COP26 climate summit which the UK will host in Glasgow in November.

"The competition regulator's new code will help to ensure this with advice on how best to communicate and understand environmental claims," business minister Greg Hands said.

"Government is also currently reviewing green energy tariffs to ensure consumers can be confident they are choosing companies that make a conscious choice to invest in renewable energy."

Under an investigation announced last year, the CMA has found as many of 40 percent of green claims made online could be misleading, with thousands of businesses potentially breaking the law.

Lisa Barber, an editor at the consumer magazine Which?, said there were concerns about a range of "dubious and confusing" green claims from industries including airlines, energy companies and investment firms.

"The regulator should be prepared to take strong action against any companies found breaching the law ahead of its review, to prevent consumers from being misled by deceptive or false green claims," she said.

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