Public danger number 1: all against greenwashing

The fight against greenwashing and its misleading marketing dynamics raises the bar and puts fashion in the crosshairs with increasingly widespread and wide-ranging actions. Actions that involve not only brands and retailers but also financial funds and companies that assess (how?) their green impact


All against greenwashing. Institutions, environmental associations, companies that invest in pursuing genuine sustainability, and, of course, consumers want it. It is not only fashion that wants it because, so far, it is also finance where repression seems to be most incisive. That’s right: finance. In fact, the U.S. Securities and Exchange Commission is examining investment funds that declare high scores on environmental, social, and governance metrics. In other words: ESG (Environmental, Social, and Governance).

The dark side of finance

“Those offering investments must fully and fairly disclose what they sell and act consistently with such disclosures,” reads a Commission statement. At the same time, the European Union has drafted the Corporate Sustainability Reporting Directive, which from June 2023, will oblige all ‘large’ companies operating in the EU or owning securities listed in the area to produce new and extensive reports on the environmental effects of their activities and their parent companies. An anti-greenwashing regulation that is causing alarm on Wall Street, as it would entail a great deal of work even for the largest US investment banks.

All against greenwashing

If finance is moving, it means that greenwashing is indeed a danger. And even in fashion, regarded as one of the worst sectors in terms of climate impact, there are initiatives to combat it. The latest has seen the Competition and Markets Authority (CMA), the UK’s competition watchdog, launch an investigation into the sustainability claims of fast fashion brands Boohoo, Asos, and supermarket chain Asda’s George clothing label. This decision puts fashion at the forefront of the crackdown on greenwashing.

Fashion at gunpoint

Last June, the Norwegian Competition Authority (NCA) banned the brand Norrøna and the Swedish fast fashion giant H&M from using the Higg index to qualify their product labels, considering it misleading. Not only that. The European Union is preparing a series of legislative acts to curb the fashion industry’s environmental impact and ensure that ‘green’ information is backed up by facts and is credible. This is all the more necessary as, crossing the Atlantic, a class action lawsuit was filed in the US in July, again accusing H&M of ‘misleading sustainable marketing‘.

Greenwashing is everywhere

Greenwashing is everywhere and is, unfortunately, very effective, especially for those who claim to be concerned about the environment. The New York Times writes that the British consulting firm Behavioral Insights Team conducted a survey to find out how vulnerable we all are to greenwash. In Australia, three fictitious energy company advertisements were shown to 2,400 people. The first commercial advertised a company’s green credentials. “Our offices are green,” the ad read, without going into the details and leaving out the fact that the company itself produced and sold fossil fuels.

The second ad asked the viewer, “How can you save energy?” and offered a ‘carbon footprint’ calculator, the parameter used to estimate the greenhouse gas emissions caused by a product, service, organisation, event, or individual. This commercial contained no information about the company.

The third highlighted how the sponsored company had created jobs without any reference to environmental issues. Well: 57% of the people involved in the survey fell for the trick and stated that the (fictitious) companies advertised in the first two ads had stronger ‘green credentials’ than the third. “It is assumed that everyone is rational, that an educated consumer question the market, but this is not the case”.

Far west

From September 2021 to April 2022, CMA received 21 complaints about greenwashing. Five involved fashion brands. ‘With US-based class actions becoming increasingly common in the UK and Europe,’ comments Ciara Cullen, partner at RPC Group, ‘companies will not only face increased regulatory scrutiny. They may also find themselves having to pay significant sums to disgruntled customers’. Will it happen? (mv)

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