New Regulations Target Greenwashing in the Fashion Industry: Regulatory Framework Needs Tightening

Fashion giant H&M is no stranger to court battles over its environmental claims. In July 2022, in the case "Commodore v. HM Hennes Mauritz LP" filed in New York State, the allegations were similar to previous ones: H&M used labels, marketing, and advertising "designed to mislead consumers," particularly exaggerating the environmental attributes of its products in its "Conscious Choice" collection. These allegations were so familiar that in May 2023, H&M's lawyers, when moving to dismiss the case, cited a Missouri judge's previous dismissal of an almost identical case—filed in November 2022.

At the heart of the dispute is the wording. Plaintiffs in the Missouri case cited the U.S. Federal Trade Commission's (FTC) 2012 "Guides for the Use of Environmental Marketing Claims" (the "Green Guides"), which state that "marketers should not make unqualified, general environmental benefit claims" and that "marketers should not state or imply that an environmental benefit is insignificant," recommending "using clear and prominent qualifying language that limits the claim to specific benefits." However, the Missouri judge ruled that H&M had not crossed the line, writing in his decision: "H&M does not claim its products are 'sustainable' or 'more sustainable' than competitors, but rather that its Conscious Choice garments contain 'more sustainable materials' and that the collection includes 'its most sustainable products.'"

"Proving greenwashing is difficult, and without objective standards, denying it is easy."

—Hilary Jochmans, Founder of PoliticallyInFashion

This ruling reflects the current legal landscape regarding environmental claims. Hilary Jochmans, head of a government affairs consulting firm in Washington, D.C., and founder of PoliticallyInFashion, a platform for regulatory engagement in the fashion industry, noted: "There is no legally binding definition of greenwashing at the federal or state level. Without objective standards, proving greenwashing is difficult, while denying it is easy."

But the FTC's rules may soon tighten the language, making it harder for advertisers to make unsubstantiated claims. In December 2022, the FTC announced it would revise the Green Guides for the first time in over a decade.

Setting Green Guardrails

Lauren Carey, an attorney at the Missouri law firm Lewis Rice, wrote in an email to Fashion Dive: "Since the FTC updated the Green Guides in 2012, the scope of environmental claims has expanded, and so has the potential for deceptive advertising. The current Green Guides do not cover many 'green' claims increasingly popular in the fashion industry and beyond, such as 'sustainable,' 'organic,' 'eco-friendly,' 'carbon neutral,' and 'upcycled.'"

The FTC has sought feedback on sustainability-related terms commonly used in advertising or labeling, such as "net zero" and "recyclable," and asked whether it should "revisit" the term "sustainable" itself. In 2012, the FTC "found insufficient basis to provide specific guidance on how consumers understand 'sustainable' claims."

Jochmans believes defining this ubiquitous term is crucial. PoliticallyInFashion launched a campaign in 2021 calling on the FTC to update the guides. She said that without "guardrails" for "sustainable," weary consumers will stop buying sustainable products.

"The more often you see the word without substance behind it, the more you start to question what it really means," Jochmans said. "I pay a premium for sustainability, do a lot of due diligence, and find it doesn't live up to the name. Forget it, I'll just buy whatever I want, and trends will rebound. I think we're at that tipping point."

H&M responded in an email to Fashion Dive: "H&M is committed to transparency and works hard to reduce fashion's impact on the environment. We take these allegations very seriously and have thoroughly investigated them. We want to emphasize that our sustainability work has never been 'greenwashing'—that is completely contrary to our stance."

Europe Takes the Lead

In Europe, however, the same wording has gotten H&M into trouble. In 2019, the Norwegian Consumer Authority criticized H&M's sustainability claims in its Conscious collection and annual report during media interviews. In June 2022, the Authority warned H&M in a letter that using the Higg MSI (a sustainability score) for marketing "could easily be perceived as misleading under Norwegian law." In 2021, the Netherlands Authority for Consumers and Markets concluded after an investigation that "H&M used 'Conscious' and 'Conscious Choice' sustainability claims without explaining what they actually mean."

To avoid sanctions, H&M committed in August 2022 to revise product descriptions, remove the "Conscious" and "Conscious Choice" labels from its website, and pledged to donate 500,000 euros (approximately $529,217 at the then-current exchange rate) to an environmental nonprofit organization.

Now, the EU is pushing for legislation to end greenwashing. In 2020, a European Commission study found that 53% of the 150 environmental claims it examined provided "vague, misleading, or unfounded information about the environmental characteristics of products." In March 2023, the European Parliament proposed the Green Claims Directive, which would ban such advertising and aggregated environmental impact scores, echoing the approach of the Norwegian Consumer Authority. If the law passes (possibly as early as late 2024), sanctions will vary by country, but a white paper by consulting firm Quantis notes that "these sanctions will certainly not be trivial." The white paper estimates France could impose fines of 300,000 euros, or up to 10% of a company's annual revenue, or 50% of the cost of producing the offending advertisement.

Gul Kaner, a fashion researcher at the University of Portsmouth in the UK, says what remains in a gray area are broad statements companies might make about their philosophy. She said: "For example, a brand might sincerely state its goal is to be 80% sustainable by 2025, but if it doesn't provide any methodology or plan to achieve that goal, it won't convince consumers. They must be transparent about goals, strategies, and solutions."

But outright falsehoods are not in the gray area. Kaner cited H&M's "Let's Close the Loop" garment collection program, which claimed to resell, reuse, or recycle collected second-hand clothing. This summer, an investigation by the Swedish newspaper Aftonbladet revealed the fate of seven lightly worn garments fitted with AirTags and dropped into H&M store collection bins: three disappeared into textile waste sites or overloaded second-hand markets in Benin, India, and South Africa; two were shipped to Romania for second-hand sale; and two, despite being in good condition, were ground into fibers—a process H&M says is only for unwearable garments. All of this occurred after the garments traveled thousands of carbon-emitting miles.

"It has to be mandatory."

—Gul Kaner, Fashion Researcher at the University of Portsmouth, UK

An H&M spokesperson said the garments arrived at "well-known and suitable partners" for resale and recycling. The spokesperson said: "We acknowledge that the industry still faces global challenges, including a lack of global infrastructure to support the collection of used textiles and a lack of scalable recycling solutions. The H&M Group is actively investing and working in these areas."

"This news even broke my heart," said Kaner, who had previously considered H&M's sustainability efforts "commendable." "They did a lot of publicity and marketing around this recycling program, but even that was a lie."

She said such cases prove that if left to their own devices, companies will not make sustainability a top priority. "But it has to be their biggest goal," Kaner added, and this can only be achieved through external pressure. "It has to be mandatory."

Companies like H&M are well aware of the upcoming legislation. An H&M spokesperson said: "We support the overall goals of the proposed Green Claims Directive legislation. We are studying how the proposal will affect the entire industry, and are therefore engaging with policymakers, peers, and other stakeholders to ensure the law's implementation helps achieve its objectives."

The Waiting Game

The EU may be ahead of the U.S. in proposing specific anti-greenwashing legislation, but Carey notes the FTC is aware of European developments. She mentioned that the FTC asked in its request for comments: "Are there international laws, regulations, or standards regarding environmental claims that the Commission should consider in its review of the Guides?" and whether it should "modify the Guides to harmonize with these international laws."

Even if the FTC hasn't updated the Guides yet, the Green Claims Directive will affect U.S. companies because it applies to any marketing aimed at European audiences, regardless of where the company is headquartered. Jochmans said this will have a "psychological impact" in the U.S. She said: "This is a global industry. You market in a certain way in France, and it's impossible for people in New York not to see it, and vice versa."

From December 2022 to April 2023, the FTC received more than 1,360 comments on the update. The FTC declined to provide a timeline, but Jochmans said revisions typically take several years.

Jochmans believes regulation is crucial to leveling the playing field between brands that claim to operate sustainably and those that genuinely practice sustainability. The latter "invest effort, time, and resources to 'do the right thing.'" She said: "They want to ensure... that those who are just going through the motions don't profit from it."