Image source, Getty Images
By Dearbail Jordan
Business reporter, BBC News
"Green" claims made in advertising for household basics, such as washing-up liquid, are to be scrutinised to see if they are misleading.
The Competition and Markets Authority (CMA) said it is concerned consumers are "paying a premium for products that aren't what they seem".
It will examine the accuracy of environmental claims on goods such as cleaning products and toiletries.
CMA boss Sarah Cardell said she is concerned companies are "greenwashing".
This is when a firm exaggerates its environmental credentials for marketing purposes.
"As more people than ever try to do their bit to help protect the environment, we're concerned many shoppers are being misled and potentially even paying a premium for products that aren't what they seem, especially at a time when the cost of living continues to rise," Ms Cardell said.
She said it would be looking at both big and small firms' products to see if the environmental claims they made were true.
The investigation will also look into the accuracy of green claims made about food and drink. The CMA said last year shoppers spent £130bn on household essentials.
It said "a significant number" of household products are marketed as green or environmentally friendly, including almost all dishwashing items and toilet products.
The watchdog said it is worried about a number of areas including products that use "vague and broad" statements such as claiming packaging is sustainable or "better for the environment" with no evidence.
It will also look at claims over the use of recycled or natural materials in products, as well as whether entire ranges are being incorrectly branded as "sustainable".