While climate change-related litigation has so far mainly concerned governments (see the Urgenda case against the Dutch government*) or multinationals (see the “People v Shell” case**), fashion companies have not been spared either.
Even if no concrete action has yet been taken against a fashion company, legal proceedings could be initiated if NGOs or members of the public find that these companies are not fully transparent about the impact of their activities on climate change.
This hypothesis could also have an impact on governments, which would then be accused of failing to anticipate by establishing strict laws on the recycling of fashion items. To go further, the authorities could even consider adopting strict laws that would apply to the fashion industry and directly affect the profitability of these companies.
Several courts in Europe have been confronted with cases of misleading communication linked to respect for the environment or sustainability. This misleading communication concerns a variety of products, including clothing. Some of these cases will be discussed in this article.
We will first look at the fashion industry’s initiatives to combat climate change, and then focus on the industry’s sustainability claims.
The fashion industry’s impact on climate change
Climate change has a direct impact on the fashion industry: through water sources, pollution levels, as well as everything to do with the agricultural practices used to produce certain materials. All of which have a significant impact on the planet’s ecological balance.
Given the considerable repercussions on the environment, the fashion industry has committed itself to adopting more responsible behaviour through the Fashion Industry Charter for Climate Action, initiated by the United Nations. This document, signed by 101 fashion companies, sets out 16 principles aimed at significantly reducing greenhouse gas emissions, encouraging sustainable practices and promoting legal initiatives. It is a key element in pushing the fashion industry to commit to more responsible practices.
Companies in the fashion sector are undergoing major transformations as a result of climate change. The sector is being forced to change its habits and implement different production methods. These are coming under scrutiny because of their widely recognised contribution to carbon emissions. The fashion industry produces 1.2 billion tonnes of greenhouse gases a year, more than the emissions from international travel and shipping combined, which is considerable. Several studies estimate that by 2030, the sector’s emissions could increase by more than 60%. In order to limit fashion’s environmental impact on climate change, industry players are urged to use renewable energy sources and re-evaluate their production methods.
Companies in the fashion industry are facing major challenges related to climate change. The sector is responsible for greenhouse gas emissions, water pollution and the depletion of certain resources due to the mass production of articles. This problem is perfectly illustrated by the fast fashion industry and the large quantities of textile waste that can be found in Europe, but above all on beaches in developing countries. It’s important to note that the fashion industry is the second biggest consumer of water in the world. It takes around 2,700 litres of water to produce just one cotton shirt, and up to 10,000 litres to make a pair of jeans. The second biggest source of water pollution in the world is the dyeing process, which is essential to the manufacture of textiles. Remains of the dye are sometimes found in streams and rivers, confirming the negative impact of this practice on the environment.
In order to evolve, the fashion industry must adopt more sustainable practices. By encouraging ethical behaviour, fashion, known for its creativity, could appeal more to consumers while reducing its negative impact on the planet.
When fashion companies engage in misleading communication
The fashion industry has been confronted on several occasions with cases of misleading claims relating to environmental protection. Below are a few recent cases in Europe.
In the Netherlands, the Dutch Authority for Consumers and Markets (“ACM”) found that the fast fashion chain H&M was wrongly using sustainability-related terms such as “Conscious” and “Conscious Choice”, without detailing the ecological benefits associated with the products concerned. Similarly, French sports and leisure goods retailer Decathlon failed to specify the environmental benefits of its “Eco design” sustainability label. As a result, these fashion brands have pledged to donate €400,000 and €500,000 to environmentally-friendly causes to compensate for the lack of clarity in their sustainability statements.
Fashion company H&M also came under scrutiny from the Norwegian Competition Authority for misleading practices relating to the company’s ‘Conscious Collection’, which lacked any legal definition of the terms ‘sustainable’, ‘green’ and ‘environmentally friendly’.
In the UK, the Competition and Markets Authority (CMA) recently announced that, as part of a wider investigation into greenwashing, it was looking at fashion retailers such as ASOS, Boohoo and George, located in the Asda shop. The investigation is looking at whether consumers are being misled by companies that claim to be environmentally friendly and sustainable.
Other important factors are taken into account, such as the type of materials used in the design of parts, their origins, and the terms used in the description, which are sometimes vague and can mislead consumers about the sustainable and environmentally-friendly nature of products.
The ecological claims of other fashion brands, such as Mango, Primark, Tesco F&F and Zara, which are adept at “committed”, “made faithfully” and “join life”, are also coming under scrutiny. They are also accused of providing consumers with confusing information and sometimes lacking transparency. Most of these brands have begun a transition, using materials of only slightly higher quality, while continuing to produce in large quantities.
Other fashion companies have come in for heavy criticism for describing their products as sustainable and environmentally friendly, without being transparent about the composition and origin of the materials used in their products. Such is the case with the Japanese ready-to-wear brand Uniqlo. In the United States, legal cases relating to sustainable development are multiplying. In the civil case of “Lee v Canada Goose”, the New York judge rejected a request for Canada Goose to be dismissed for allegedly misleading its customers about the ethical source of the fur used in its coats. The court ruled in favour of the plaintiff, but considered that the charges were not extremely serious, even if the promises were likely to mislead customers.
Some competition regulators publish recommendations to show companies how they might approach environmental protection issues. The UK’s ASA (the Advertising Standards Authority, the advertising industry’s self-regulatory body), in its report on green claims, gave its views on how sustainability claims should be clear and take into account the full life cycle of the product being promoted, unless otherwise stated. It also considers that sustainability claims should not be considered exhaustive if there is no scientific confirmation.
To combat abusive environmental claims, the authorities have investigated one of the Sustainable Apparel Coalition’s (SAC) best-known sustainability rating systems, the Higg Index. In a joint report by the Norwegian ANC and the Dutch ACM, published in August 2022, the environmental impact of the production of garments from certain fabrics was analysed and it was concluded that the statements made by Norwegian retailers were not sufficiently corroborated by the data in the Higg MSI Index. As a result, this could easily be considered misleading and contrary to EU legislation. Norwegian clothing brand Norrøna was therefore banned from using this tool to support its environmental claims.
Future European laws on environmental claims and greenwashing practices
Over the past two years, the European Commission has put forward two major legislative proposals aimed at ensuring the validity of environmental claims (“Proposal for a Directive on Environmental Claims”) and preventing “greenwashing” practices (“Directive on Combating Greenwashing”).
Proposal for a directive on ecological claims
The proposed Directive on Environmental Claims introduces common criteria against misleading environmental claims. It would require companies to comply with minimum conditions when justifying and communicating environmental claims. These requirements would apply to explicit claims and would also aim to prevent the proliferation of new public and private environmental labels.
In addition, the proposed directive on environmental claims no longer authorises labels that use an overall rating of the product’s general environmental impact. Environmental labels would be further regulated to prevent their proliferation. New public labelling schemes would not be permitted, and new private schemes would have to be assessed before being approved.
The proposed directive on green claims has not yet been formally approved at the time of writing, but it is highly likely that it will be adopted sometime in 2024.
Anti-greenwashing directives
The Commission’s anti-greenwashing directive amends the Unfair Commercial Practices Directive 2005/29/EC (“UCPD”) and the Consumer Rights Directive 2011/83/EU to empower consumers for the green transition through stronger protection against unfair practices and better information.
In particular, the directive on combating greenwashing amends the directive on unfair commercial practices to include the following practices in the list of prohibited misleading unfair commercial practices: “making generalised and vague environmental claims” and “displaying a voluntary sustainability label that is not based on a third-party verification system or approved by public authorities”.
The European Parliament and the Council of the EU have reached agreement on the content of the directive on combating greenwashing. The directive is due to be published in the EU’s Official Journal in early 2024.
Future environmental challenges for the fashion industry
The fashion industry will be facing some major challenges in the near future. Tougher requirements for environmental claims will have a considerable impact on companies operating in the fashion sector, which are already facing legal action in several European countries. Fashion companies will have to ensure that the labels and claims they display on their clothing are based on scientific evidence to avoid any risk of legal action. In addition, although it is somewhat more unlikely, they could face stricter requirements in terms of recycling and reuse from the countries in which they sell their products, due to the increase in litigation linked to climate change.
Written by
Lucas Falco (lawyer) and Annea Bunjaku (legal expert), EDSON LEGAL
Read more – Fashion United
Sources:
– Urgenda Foundation v. State of the Netherlands Climatecasechart.com (Climate Change Litigation Database) filing date 2015
– Milieudefensie et al. v. Royal Dutch Shell plc. Climatecasechart.com (Climate Change Litigation Database) filing date 2019
– Exxon Mobil Corp. v. Office of the Attorney General Climatecasechart.com (Climate Change Litigation Database) filing date 2016
– Matthew Hilbberd, ‘Key challenges for the fashion industry in tackling climate change’, Studies in Communication Sciences 18.2 (2018), p.383 and pp. 393-394.
– Business Insider article ‘How Fast Fashion Hurts the Planet Through Pollution and Waste’ by Morgan McFall-Johnsen, 21 October 2019
– United Nations Climate Change ‘Fashion Industry, UN Pursue Climate Action for Sustainable Development’, 22 January 2018
– ACM publication Commitment decision for H&M regarding sustainability claims, 13 September 2022
– Business Human Rights Resource Centre article ‘Netherlands: H&M and Decathlon to remove sustainability labels from products following investigation by regulator into potentially misleading claims’ , 14 September 2022
– Gov.UK CMA ‘ASOS, Boohoo and Asda: greenwashing investigation’, 26 January 2023
– Greenpeace blog ‘Fashion greenwash: how companies are hiding the true environmental costs of fast fashion’, 24 April 2023
– Earth.org ‘5 Fast-Fashion Brands Called Out for Greenwashing’ by Martina Igini, 24 August 2022
– Proskauer on Advertising Law ‘United States District Court Southern District of New York against Canada Goose Us, INC.’, filed June 2021
– Asa.Org.uk The Cap Code Environmental Claims
– ACM & Norwegian Consumer Authority report ‘Guidance to the sustainable apparel coalition environmental claims in marketing towards consumers based on the Higg msi’, 5 October 2022
– EU Unfair commercial practices: https://eur-lex.europa.eu/EN/legal-content/summary/unfair-commercial-practices.html
– European Commission ‘Green Claims Directive Proposal’ 22 March 2023: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52023PC0166
– European Commission ‘Anti-Green Washing Directive’, 30 March 2022: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52022PC0143&qid=1649327162410
– European Commission ‘Unfair Commercial Practices Directive’, 11 May 2005: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02005L0029-20220528
– European Commission ‘Consumer Rights Directive’ 25 October 2011: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02011L0083-20220528