Global fashion brands are in the spotlight as journalists, lawyers and regulators take a closer look at companies’ sustainability practices.
A proposed class-action lawsuit filed last week alleges athleisure company Lululemon Athletica misled consumers on its plans to improve its environmental impact, WSJ reported.
In another instance, documentary journalists in Switzerland last month reported that some running shoes purchased from the Swiss sportswear brand On weren’t being recycled, as marketing materials promised.
And last week, fast-fashion giant Shein announced an investment of $270 million aimed at tackling the waste from clothes that are worn only a few times before being discarded. Its announcement came after a planned initial public offering in New York stalled, partly due to regulators’ concern on the sustainability of the company’s business practices.
Apparel companies trumpet their sustainability goals to calm the concerns of environmentally-conscious customers. Yet as more mandatory environmental disclosures take effect, reams of data are being held up to the light by an increasingly skeptical public.
Chris Cole, partner at the law firm Katten, called greenwashing suits the “next frontier” in class-action litigation. “I’ve been predicting this carbon thing is going to blow up in people’s faces over the next decade or so as these pledges start to come due,” he said.
The Lululemon case, filed in the U.S. District Court for the Southern District of Florida, revolves around the company’s Be Planet initiative, launched in 2020. In the wide-ranging campaign, the company pledged to substantially increase its use of sustainable materials by 2025, reduce water use, and bring down emissions-intensity, broadly defined as the amount of greenhouse gases emitted per product sold.
Instead, the complaint claims the company’s emissions have doubled since 2020 and says the company’s sustainability goals amount to false advertising. The legal action follows similar misgivings in Canada, where the country’s Competition Bureau in May opened a formal investigation into Lululemon’s green claims.
In a statement, a Lululemon spokesperson said, “We are confident the statements we made to the public accurately reflect our impact goals and commitments,” adding that Be Planet isn’t a marketing campaign.
H&M and Nike were both hit with proposed class-action lawsuits alleging greenwashing in recent years. The H&M case was dropped by plaintiffs, while the Nike suit was dismissed.
It is not uncommon for companies to set environmental goals only to revise them later. Both Google and Microsoft recently reported large increases in emissions despite aggressive net-zero pledges.
The question of when, exactly, a missed goal post turns into “greenwashing” is still being settled. The Federal Trade Commission is working on an update to its Green Guides, a set of standards for advertisers asserting environmental benefits. The current version doesn’t clarify what proof companies need to offer to support their claims about future emissions.
In the meantime, the BBB’s National Advertising Division, an ad-industry self-regulatory group, has made recommendations on aspirational claims.
“If you’re going to make these statements about what you’re doing and what deadlines we’re going to meet, it can’t just be a promise on a wing and a prayer,” Cole said, summing up the BBB’s principles. “You have to have actual concrete plans and maybe even some progress along those lines.”
Last year, European Commission officials rolled out proposed greenwashing regulations to ensure companies’ green claims are verifiable.
Some brands have built entire sales strategies around circularity claims. In 2022, the Swiss athletic apparel brand On launched a subscription service premised on the idea that consumers would never fully “own” a pair of shoes. Instead, they’d send worn-out sneakers back to the company and receive a new pair. Old sneakers would be recycled and turned into new sneakers, creating a closed-loop circular economy that minimized waste.
But last month, the TV documentary show Temps Présent aired a lengthy investigation on the company and found the company wasn’t actually recycling the returned shoes. A Swiss consumer advocacy organization, Fédération romande des consommateurs, said it is conducting further investigations into On.
In an emailed statement, On said it hadn’t begun recycling the shoes because it hadn’t yet received enough returns to run the program efficiently. The company said its recycling program will begin next month, two years after the initial launch.
Last year, three-quarters of executives surveyed in a Harris Poll said they believed most organizations in their industry would be caught greenwashing if investigated thoroughly. Outside scrutiny of sustainability claims has resulted in “green hushing,” or corporate silence on sustainability topics.
Some companies have focused their sustainability-messaging on very specific efforts, rather than sweeping commitments or long-term goals. For instance, when Shein announced its $270 million investment, the firm said much of the money would support companies working on textile-recycling technologies.