By Erika Koutroumba,
Earlier this month, fast fashion conglomerate H&M got investigated by the Dutch authorities on the validity of their allegedly bio-sustainable “conscious” clothing line. In recent years, more companies are becoming subjects of scrutiny regarding their work practices and impact on the environment. Many have attempted to exploit the latest trend of ethical consumption, while barely tweaking their strategies to avoid losing money by baptizing their brand as “eco-friendly”. This phenomenon, rapidly augmenting in scale since the 2010s, is termed “greenwashing”. According to a 2021 report by the UK competition markets authority, up to 40% of “eco-friendly” claims online had no supporting evidence. However, other than the ethical factors involved, are companies allowed to make such claims by the law, and how severe are the penalties for possible offenders?
The current economic model followed by most fashion companies relies on constant production and trend updates with the lowest cost possible. Hence, it is unsurprisingly the second most carbon-producing sector and one of the least regulated fields of modern commerce, second only to the oil industry. In the past five years, with the United Nations pointing out the urgent need for action against climate change and emphasis on conscious consumption, the demand has changed. In 2018, the fashion charter was announced by the United Nations and co-signed by major brands, including H&M, and recently “The Fashion Act”, a bill backed by New York legislation, made waves by also requiring companies to do their due diligence. It becomes evident that in this day and age, greenwashing inhibits progress manipulating consumers, many of whom are willing to pay up to a 9% premium for more sustainable products.
While most countries do not have greenwashing-specific legislation, exaggerated claims such as these fall under other subspecialties of law, namely unfair commercial practices, and consumer rights law. Currently, terms such as “planet friendly” and other “ESG” related terms have been defined in EU Taxonomy law, though there are no strict punishments for misuse yet. The United Kingdom has proven to be a leader in tackling greenwashing, with the Financial Conduct Authority (FCA) highlighting the urgency of quick action, with policy proposals coming in this fall. At the same time, the United States Security and Exchange Commission (SEC) this spring released suggestions for Climate change exposure rules which are to be finalized by the end of this year. This worldwide trend of adjustments in the legal systems suggests that companies such as fashion moguls ought to change their habits to be aligned with their claims and fast.
While H&M might have gotten away with a slap on the wrist and a simple warning, this might not be the case soon. Through greenwashing, not only do companies manipulate their consumers and partake in unfair practices, but they also endanger our planet and the future of humankind. Governments are encouraged to take a stance against this practice, and new bills protecting consumer rights have been under discussion. One thing is certain; there is still a long way to go, and it has never been of greater importance to tighten the regulation of the fashion industry.
References
- H&M Case Shows How Greenwashing Breaks Brand Promise, forbes.com, Available here
- (Un)sustainable fashion: H&M is being sued for greenwashing, renewablematter.eu, Available here
