What Is Greenwashing And Why Are More Companies Being Accused of It?

This article was originally published by members of the Wilson College of Textiles’ Fashion Textile and Business Excellence Cooperative.

Today’s fashion consumers are increasingly interested in minimizing their impact on the environment and want to shop from brands that also prioritize sustainability. 

However, in an attempt to meet these changing customer expectations, an increasing number of brands are being accused of “greenwashing:” making deceptive or untruthful claims about the sustainability of a brand’s products and operations (Lindwall, 2023). While more and more fashion brands are genuinely embracing sustainability, a Statista report revealed that around 50% of global consumers do not trust the sustainability or green claims made by clothing brands (Smith, 2022). 

Greenwashing lawsuits in fashion

Distrust of sustainability marketing claims has led to an increase in greenwashing lawsuits. In 2022,, the Federal Trade Commission (FTC) sued Walmart over its deceptive claims of textile fiber products. Walmart faced allegations that its material description “bamboo” on products such as towels was false because the original fiber of the products was rayon (Tayeb, 2022). The settlement requires  Walmart to eliminate the bamboo claims, stop using misleading green marketing claims and pay a $3 million  penalty (Federal Trade Commission., 2022a). Table 1 summarizes the lawsuit cases of several other brands who ended up in class action lawsuits as a result of greenwashing allegations.

Table 1. Greenwashing lawsuits in fashion

Company (Date)	Source of lawsuit	Causes of action	Outcome (Date)
Nike(May 2023)	Class action	Misleading marketing of the brand’s sustainability collection that is not sustainable	Pending(As of Sep 2023)
H&M(Nov 2022)	Class action	Misleading marketing of the brand’s “Conscious Choice” line as sustainable or environmentally friendly	Dismissed(May 2023)
Walmart(March 2022)	FTC(Federal Trade Commission)	False advertisement of bamboo products that are actually manufactured using rayon	A $3 million settlement(April 2022)
Allbirds(Jun 2021)	Class action	Misleading claim regarding environmental impact and animal welfare in its advertisements for wool shoes	Dismissed(April 2023)
Canada Goose(Nov 2020)	Class action	Misleading claim that its fur was ethically sourced	Voluntarily dismissed(April 2022)

What are typical types of greenwashing?

TerraChoice, an environmental marketing consultancy based in Canada, breaks greenwashing practices down into seven sins in its report titled “Sins of Greenwashing.” Table 2  explains each sin. 

Table 2. The Seven Sins of Greenwashing by TerraChoice

Sin of	Description
The hidden trade-off	A claim suggesting that a product is green based on a narrow set of attributes without attention to other important environmental issues
No proof	An environmental claim not substantiated by easily accessible supporting information or by a reliable third-party certification
Vagueness	A claim that is so poorly defined or broad that its real meaning is likely to be misunderstood by the consumer
Worshiping false labels	A product that, through either words or images, gives the impression of third-party endorsement where no such endorsement exists
Irrelevance	An environmental claim that may be truthful but is unimportant or unhelpful for consumers seeking environmentally preferable products
Lesser of two evils	A claim that may be true within the product category but that risks distracting the consumer from the greater environmental impacts of the category as a whole
Fibbing	Environmental claims that are simply false

Guides for the use of green marketing claims

In the U.S., the FTC’s Green Guides serve as  the prominent guidance on the use of environmental marketing claims.The “Green Guides” address general principles and consumers’ interpretation of environmental marketing claims and provide options for claim qualifications to prevent consumer deception. The guides were last updated in 2012, and in December 2022, the FTC announced that it is asking for public comment on potential revisions and modifications to the section about using environmental claims. The issues sought for public comment include carbon offsets and climate change, the term “recyclable” and “recycled content,” and the need for further guidance concerning claims such as  “compostable” and “sustainable,” in addition to matters related to energy consumption and energy efficiency (Federal Trade Commission, 2022b).

Aside from the FTC in the U.S., the European Commision, part of the European Union, proposed the “Green Claims” to address greenwashing concerns in March 2023. Under the proposed regulation, companies operating in the European markets would need to use explicit claims for their environmentally sustainable products or services that are supported by independent verification and scientific evidence. The proposed rules may regulate not only the clarity of claims but also the spread of untrustworthy environmental labels (the European Commision, 2023). 

Implications

Academic research has found that greenwashing ultimately affects consumers in a way that is detrimental to the brand.  When consumers are aware of brands’ greenwashing engagement, their attitude toward the brands and purchase intention can decline (Szabo & Webster, 2020). This might be because once consumers become aware of the  greenwashed brands’ hypocrisy (Xiao et al., 2022), they feel deceived by that business (Ansari & Gupta, 2021). This can ultimately lead them to avoid shopping from or supporting the brand (Xiao et al., 2022). 

Over time, consumers are likely to become more conscious of the authenticity of green claims and governments will also reinforce crackdowns on greenwashing. Due to fear of being criticized for greenwashing, some companies deliberately choose not to communicate their sustainability and ethical practices, causing a new phenomenon called “green hushing” (Visram, 2023). Whether the greenwashing allegation is true or false, it definitely gives that brand a negative impression. Therefore, it is expected for fashion companies to communicate transparent and substantiated claims for their environmentally sustainable products or services.

References

Ferris, T., Lawlor, J., & Ketterer, E. (2023, June 2). Guidance for ‘sustainable’ claims after dismissal of H&M ‘greenwashing’ class action. Reuters. https://www.reuters.com/legal/legalindustry/guidance-sustainable-claims-after-dismissal-hm-greenwashing-class-action-2023-06-02/ 

Federal Trade Commission. (2022a). FTC Uses Penalty Offense Authority to Seek Largest-Ever Civil Penalty for Bogus Bamboo Marketing from Kohl’s and Walmart. https://www.ftc.gov/news-events/news/press-releases/2022/04/ftc-uses-penalty-offense-authority-seek-largest-ever-civil-penalty-bogus-bamboo-marketing-kohls 

Federal Trade Commission. (2022b). FTC Seeks Public Comment on Potential Updates to its ‘Green Guides’ for the Use of Environmental Marketing Claims. https://www.ftc.gov/news-events/news/press-releases/2022/12/ftc-seeks-public-comment-potential-updates-its-green-guides-use-environmental-marketing-claims 

Han, K. (2023, August 27). ‘Greenwashing’ companies wearing eco-friendly masks have begun to punish them. Chosunilbo. https://www.chosun.com/economy/weeklybiz/2023/08/24/CUHW76M75FF7ZDI57ICPVENJIY/ 

Howland, D. (2023, May 15). Nike faces lawsuit over greenwashing claims. Retail Dive. https://www.retaildive.com/news/nike-faces-lawsuit-greenwashing-claims/650282/ 

Kent, S. (2022, November 8). Can Fashion Stop Greenwashing? Business of Fashion. https://www.businessoffashion.com/articles/sustainability/greenwashing-fashion-marketing-sustainability-hm-regulation/

Lindwall, C. (2023, February 9). What is greenwashing? Natural Resources Defense Council. https://www.nrdc.org/stories/what-greenwashing 

Spicer, C. (2021, June 14). Allbirds Misrepresents ‘Carbon Footprint,’ ‘Ethically Sourced’ Shoes, Claims Class Action Lawsuit. Top Class Actions. https://topclassactions.com/lawsuit-settlements/consumer-products/apparel/allbirds-misrepresents-carbon-footprint-ethically-sourced-shoes-claims-class-action-lawsuit/ 

Szabo, S., & Webster, J. (2021). Perceived greenwashing: the effects of green marketing on environmental and product perceptions. Journal of Business Ethics, 171, 719-739. 

Tayeb, Z. (2022, April 10). FTC sues Walmart after claiming that it deceptively advertised some of its products as ‘made from bamboo’. Business Insider. https://www.businessinsider.com/walmart-sued-ftc-falsely-advertises-bamboo-products-2022-4 

The European Commision. (2023, March 22). Consumer protection: enabling sustainable choices and ending greenwashing. https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1692 

The Fashion Law (2023, May 16). Fast Fashion Gaint H&M Wins Lawsuit Accusing it of Greenwashing. https://www.thefashionlaw.com/hm-escapes-lawsuit-accusing-it-of-greenwashing-its-fast-fashion-wares/ 

Truth in Advertising. (n.d.). Fur in Canada Goose Products. https://truthinadvertising.org/class-action/fur-in-canada-goose-products/ 

Visram, T. (2023, March 10). What is ‘green hushing’? The new negative sustainability trend, explained. Fast Company. https://www.fastcompany.com/90858144/what-is-green-hushing-the-new-negative-sustainability-trend-explained 

Xiao, Z., Wang, Y., & Guo, D. (2022). Will Greenwashing Result in Brand Avoidance? A Moderated Mediation Model. Sustainability, 14(12), 7204.