Lawsuits and Legislation Try to Clean Up Fashion’s Greenwashing Problem – WWD

Fashion brands have long been promoting their environmental credentials through catchy collection names and slick ad campaigns. Now, lawyers and legislators are coming for any unsubstantiated claims that are known as “greenwashing,” and many hope it will lead to structural change throughout the industry.

Fast-fashion giant H&M was the first retailer to be sued recently over its sustainability claims, with a class-action suit filed in New York against the Swedish retailer earlier this month. The suit claims that the majority of items H&M promotes as sustainably made are “no more sustainable than items in its main collection, which are also not sustainable,” and customers are being fleeced for items they wrongly believe are environmentally friendly.

It also takes on the brand’s claims that it recycles clothing through their program of collecting used clothing through bins in their stores. The suit alleges it led consumers to believe old clothes could be easily recycled and turned into new garments when, in fact, the technology does not exist or is not available at scale — and certainly not the scale or pace at which H&M releases new drops.

While the lawsuit focuses on H&M’s marketing — its “Conscious Collection” and the use of misleading scorecards on other products, among other things — the filing should be a wakeup call for brands to back up their sustainability claims.

“They have certainly gotten the attention of several industries and their advertising agencies. I think they’re making many companies more cautious about the claims they’re making,” said professor Michael Gerrard, director of Columbia’s Sabin Center for Climate Change Law of the class-action suit.

Maxine Bédat, executive director of the New Standard Institute, believes this case will open the door for similar lawsuits in the future, and that there will be more of them. “It can be an effective tool to get companies to be more careful and precise in their marketing claims,” she said, but cautioned that it should not stop companies from addressing the fundamental structural problems. “I hope it’s getting companies to moderate their communication around what they’re doing as opposed to chilling progress and getting them scared of [change].”

The New York lawsuit is not the only case focusing on how retailers market clothing. In the U.K., the Competition and Markets Authority is investigating the environmental claims made by fast-fashion brands Asos, Boohoo and George at Asda for using misleading slogans like “responsible,” “for the future” and “good.”

The British government body has indicated that these three brands are just the tip of the greenwashing iceberg, and it plans to put additional firms under the microscope. “We won’t hesitate to take enforcement action — through the courts if necessary,” it said in a statement.

“Those who have the least to talk about, like fast-fashion brands, are often the ones that make the boldest claims,” said Eco-Age sustainability consultant on policy, fashion and textiles Philippa Grogan, who expects many more brands to be called out by the public, through lawsuits or by regulators. “They’re only going to keep going, because they’ve just scratched the surface.”

Whatever the legal or financial outcome, brands are already paying the social price. “It’s a PR storm, having it on the record,” added Grogan. “The legal implications underpin everything so that it substantiates the investigation, but then also the headlines and the social posts that ensue: ‘X brand is investigated by the CMA.’ Hopefully that will be a deterrence for other brands. It’s such a dirty word — ‘greenwashing’ — that no one wants to be associated with it.”

That storm is in part due to a generational shift. The digital natives raised on a steady diet of social media are keenly aware of climate and justice issues, and will call out missteps by brands on TikTok, Twitter and even Instagram.

“Younger generations will be less willing to accept good products that harm the environment, have negative social impacts or are made with components in the supply chain produced in a developing country with child labor, even if it’s a great product,” said Ioannis Ioannou, associate professor at London Business School, who studies consumer perception and corporate greenwashing.

In Europe, the European Commission is also taking on green claims with a series of proposals that will prohibit the use of buzzwords at the product level that confuse consumers unless companies can back them up through a set of EU standards. The Substantiating Green Claims initiative is due to be published at the end of 2022. It’s another instrument to tackle greenwashing and aims to help consumers make better choices. “That’s going to be quite transformative, if it’s done correctly, in regulating this space that’s often referred to as the Wild West,” Grogan said of brands free range co-opting of terms.

More data, more information, more choices — all of this info is well and good — but still puts the onus on the customer. “There’s a difference between holding [brands] accountable and shining a light on their [advertising] practices and taking action to actually reduce their emissions,” Gerrard said. “It’s not clear whether the lawsuits will cause changes in the production policies or only in the marketing.”

“If we are thinking that somehow the consumers are going to drive all of this change, I think that’s a pipe dream. Labels alone are not going to get us to where we need to go,” Bédat added.

As we’ve seen with organic food labeling or mandated menu calorie counts, data doesn’t guarantee better, or even different, decisions. Case in point, the fastest-growing company in fashion isn’t any eco-minded label or even an established fast-fashion brand with publicly disclosed financials, but China’s app-based Shein.

The ultra-fast fashion brand that pushes micro-trends and drops thousands of items per day has grown at light speed with a reported $16 billion in sales in 2021, up from $10 billion in 2020. Customers might want to make the right choices, but they also want cheap clothes.

Ioannou calls it the “buffering effect” — consumers are willing to make tradeoffs between environmental benefits and a desirable product.

“One thing we should keep in mind is that it is not up to the consumer to solve this problem,” he said. “It is up to the companies — they have to rethink their products, maybe smaller packaging, maybe more innovative products — and they have to rethink their supply chains for the long run.”

Fashion does have a precedent in the Nike sweatshop scandal in the ’90s, he noted. The massive global PR fallout led Nike to reexamine its supply chain, revamp their overseas factories and ultimately invent their safer water-based adhesive. “That’s how they came back from this ‘slap in the face’…with innovation.”

If this summer of global heat waves, drought, fires and floods hasn’t been enough to make companies change of their own accord, then regulation is the next step. And here’s the twist — if consumers and their protection agencies are going after greenwashing claims, companies could start seeking out stricter environmental rules — not just standards that regulate marketing and advertising language — to level their own playing field.

“I do expect to see more regulation, and in the long term, that’s a silver lining even in cases where companies have been exaggerating or explicitly cheating [on greenwashing claims]. They’re taking on a risk, and that risk is becoming increasingly costly in a world where there’s more transparency and more accountability,” Ioannou said.

Regulations would require sustainability practices to become embedded across a company, their operations and global supply chains. Thoughtful policy ensuring true green practices would become the general cost of doing business and ensure that companies are not put at a competitive disadvantage for doing the right thing, Bédat said.

NSI supports New York’s Fashion Act, which would require any fashion retailer that has global sales more than $100 million that wants to sell in the state, the world’s 10th largest economy, to map their supply chains and set science-based targets for their greenhouse gas emissions — even Shein. The bill is expected to be up for a vote in early 2023.

In the EU, the Substantiating Green Claims proposal is expected to be published this fall and will work its way through parliament over the next year. The bloc’s Strategy for Sustainable and Circular Textiles was published last March and is set to go into effect in 2030. It includes specific measures for fabrics to be durable and recyclable, as well as have a digital product passport for traceability, require producers to take responsibility for their products along the value chain including disposal and expand fiber-to-fiber recycling. The strategy also calls on brands to reduce the number of collections each year.

That might be years away, but change is already bubbling up from below.

“Knowing that these things are coming down the pipeline has helped internal teams champion more holistic change already,” Bédat added.