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What exactly is greenwashing?

By Esmee Blaazer

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Image to illustrate greenwashing Credits: AI-generated images created by FashionUnited.

In this background piece, FashionUnited lists what greenwashing is, how common it is and what regulations and legislation are in the pipeline.

Click on the arrows in the text to find out more

Contents

  1. What is greenwashing? How common is it and what are the drawbacks?
  2. How to recognise greenwashing and when is it indeed a case of greenwashing? What are the current regulations and what legislation is in the pipeline?

1. What is greenwashing? How common is it and what are the drawbacks?

There is no set definition, but the term greenwashing refers to the misleading practices used by companies or organisations to present themselves as more environmentally friendly or sustainable than they actually are. For a better image and/or to boost sales of products and services (read: more turnover).

Misleading implies wilfulness, but companies can also engage in greenwashing by accident.

“Greenwashing can consist, on the one hand, of giving false (or misleading) information and, on the other, of not giving any or remaining silent on certain sustainability-related information ,” lawyer Judith Bussé of Edson Legal explained to FashionUnited.

Greenwashing comes in various forms (in depth)

- Vague or unsubstantiated claims
Companies may use vague language such as “environmentally friendly”, “green” or “natural” without providing specific evidence or certifications to support their claims. These terms lack clear definitions and can easily be manipulated or misinterpreted.

- Irrelevant or misleading labelling
Some products may have labels, symbols or certifications that suggest they are environmentally friendly, when in reality they only meet minimum standards or relate to another aspect of the product, for example.


- Exaggerated or even spurious claims

Companies may exaggerate the environmental benefits of their products or services by making claims that cannot be substantiated. In extreme cases, they may even make outright false statements about their environmental performance.


- Failure to give or keeping quiet about certain information

“Another form of greenwashing is deliberately withholding or keeping silent about certain information that could reveal negative environmental impacts,“ clarifies Bussé. This can be done, for example, by omitting harmful ingredients in products or concealing negative environmental impacts of production processes.

 

Greenwashing is not new, the term dates back to 1986, but you may see it popping up more than ever. Because, with consumers' growing interest in more eco-friendly products, the number of cases of greenwashing has also increased in recent years.

A study by the European Commission in 2020 found that over 53 percent of environmental claims in the EU were vague, misleading or unfounded.

Note: greenwashing is not always done intentionally or with wrong intentions. Sometimes it can stem from enthusiasm or a lack of professional knowledge.

There is no doubt that greenwashing is detrimental. It harms companies, consumers and stands in the way of the transition to a more sustainable society/future (see box below).

Greenwashing is disadvantageous

Companies that do comply and actually act more sustainably often incur higher costs than those that place claims on their products without substantial evidence. This leads to an uneven playing field, penalising fairer producers.

Greenwashing makes it harder for consumers to make sustainable choices.

Furthermore, greenwashing undermines trust in companies and the credibility of genuine sustainability efforts. As a result, progress towards a genuinely more sustainable society is hampered, as the efforts and initiatives of genuinely more sustainable companies can be overshadowed by the misleading claims of greenwashers.

2. How to recognise greenwashing and when is it indeed a case of greenwashing? What are the current regulations and what legislation is in the pipeline?

When consumers come across a sustainability claim, it is difficult to assess what that claim means. It is also difficult to determine whether it is actually a more sustainable product or not - greenwashing in that case.

This is because there is not yet a legal definition of what environmental claims mean (but this is in the works).

Bussé: “Currently, there is indeed no legal definition of what environmental claims are but a proposal was made in March 2022 to amend the general European instrument (Directive 2005/29/EC) and to add the following definitions:

- "Environmental claim" means a message or representation, not required by EU or national law, including text, pictorial, graphic or symbolic representations, in any form, including labels, brand names, company names or product names, in the context of a commercial communication, which states or assumes that a product or merchant has a positive effect or no effect on the environment, or is less harmful to the environment than other respective products or merchants, or that this effect has improved over time;

- "Explicit environmental claim": an environmental claim in text form or included in a sustainability label;

- "Generic environmental claim": an explicit environmental claim not included in a sustainability label where the specification of the claim is not made in clear and prominent terms on the same medium;

Source: https://eur-lex.europa.eu/legal-content/NL/TXT/HTML/?uri=CELEX:52022PC0143

Also, companies and organisations are fairly free to label a product as ‘sustainable’, which is not yet a protected term or label.

Exactly what rules apply? Misleading consumers is prohibited

Of course, companies are not completely free to label a product or service as sustainable. However, greenwashing is prohibited as an unfair market practice: consumers may not be led astray.

The current guidelines

The European Unfair Commercial Practices Directive (2005/29/EG)

https://eur-lex.europa.eu/legal-content/NL/TXT/HTML/?uri=CELEX:52021XC1229(05), specifically chapter 4.1

remains the overarching and generally applicable tool," Bussé says.

“In addition, there are guidelines  which specifically explain how the directive should be applied in relation to sustainability and environmental claims.”

”Communication from the Commission - Guidance on the interpretation and application of Directive 2005/29/EC of the European Parliament and of the Council concerning unfair business-to-consumer commercial practices in the internal market” See: https://eur-lex.europa.eu/legal-content/NL/TXT/?uri=CELEX%3A52021XC1229%2805%29

In Belgium, the legal framework around unfair market practices also applies supplemented by the rules drawn up by the government that companies must follow if they want to substantiate a green claim.

*Economy. Guidelines for environmental claims, drawn up in 2021.

In the Netherlands, advertisements must comply with the rules of the Dutch Advertising Code and statutory rules on comparative and misleading advertising (section 6:194a of the Civil Code et seq), lawyer Margot Span of Spargo Legal tells FashionUnited. “A seller who greenwashes a product may be violating the regulation on unfair commercial practices and acting unlawfully. Moreover, by greenwashing, a consumer buys a product he or she might not otherwise have bought or buys a product that is non-compliant. The consumer can force the seller to cease and rectify the greenwashing, compensate for damages or can decide to annul or rescind the contract,“ says Span.

“Currently, you can only take action against greenwashing through civil proceedings (misleading advertising/unfair trade practice/ tort) or through a complaint to the Consumer & Market Authority (ACM),” adds Span.

Consequences of and sanctions against greenwashing

If companies fail to comply, both European and local authorities can intervene and reprimand them. In case of violations, compensation for damages can be imposed on thesm.

In practice, greenwashing does not result in a large fine or a lawsuit. Often, companies get away with a reprimand from consumer watchdogs such as the ACM in the Netherlands or the Advertising Code Commission, for example (see boxes below).

ACM reprimands H&M
You may remember that the Dutch ACM slammed the well-known retail company H&M in 2022 for unclear sustainability claims in an enforcement action? Following this reprimand, H&M announced it would stop using the 'Consious' and 'Consious Choice' sustainability claims for its products.

The ACM launched a probe into sustainability claims in early 2021, including the clothing sector, where it saw “many potentially misleading sustainability claims”. After preliminary investigations, the ACM further zoomed in on six fashion companies, including H&M and Decathlon.

Sustainability claims must be "accurate, clear and verifiable", according to the ACM, according to the regulator. The ACM uses five rules of thumb for this purpose.

ACM: Sustainability Claims Guide
First, companies should make clear what sustainability benefits a product has. Sustainability claims should also be up-to-date and backed by facts. Visual claims and labels should be helpful to consumers and not confuse them. Comparisons with other products, services or companies should be fair, and companies are also expected to be honest and concrete about their sustainability efforts.

Fast fashion giant Primark sued for greenwashing
The Dutch Advertising Code Committee (ACC) found that six in-store sustainability billboards from Primark NL were misleading. In June 2023, Sara Dubbeldam, a fashion journalist and founder of WhenSaraSmiles.nl, filed a greenwashing complaint against the clothing giant's in-store communication. The ACC ruled in her favor in October 2023. Following this decision, Primark appealed to the Board of Appeal. In December 2023, it was revealed that the Board of Appeal also deemed Primark's investigated claims as misleading.

One of the advertisements the complaint was about are Primark's billboards showing pictures of garment makers. These pictures are accompanied by the words “training for equality” and “opportunities for all”. At the bottom of the poster, it states in smaller font that Primark wants to address this by 2030.

”If you make a claim with a certain caveat such as an aspiration, this should be clear from the expression itself. Disclaimers in badly legible small print do not suffice, especially if the disclaimer contradicts the expression itself,” reported Laura van Gijn of De Roos Lawyers, the firm representing Dubbeldam, in June last year.

Dubbeldam said: “It is essential that powerful clothing brands - and especially giants that play a major role in fast fashion’s race to the bottom take responsibility and educate people honestly about their sustainability practices. (...) If we allow big polluters to sustainably boost their image through premature communication (who says all those grand targets will be achieved?), as well as allow them to appear at first glance as if they are already happening, the end is lost. Other brands will start doing the same. It affects consumers' perception of sustainability. It reduces support for truly sustainable companies. And I am convinced that this slows down the sustainable transition,” said Dubbeldam aka When Sara Smiles, in an Instagram post about the greenwashing complaint against Primark Netherlands.

In the fashion industry, ‘race to the bottom’ refers to a phenomenon where clothing companies produce their clothes as cheaply as possible and try to cut back further and further to stay competitive because the fashion industry is a saturated and competitive market.

Price competition has been going on for decades. Our clothes have become cheaper and cheaper. Much clothing production has moved to countries with lower production costs like Bangladesh. Fashion companies have also started making more clothes from cheaper materials, such as polyester. With the rise of fast fashion companies and discounters where a t-shirt is on the shelves for the rock-bottom price of 5 euros or sometimes as little as 3 euros, price competition in the sector has further intensified.

For clothing brands, the lowest possible cost price is usually of interest. The production price is often a hard bargain - the cheaper a product can be made, the cheaper a clothing brand can market it (and the more money it can make).

Here, price often comes before human and environmental impact, and often at the expense of, for example, fair labour compensation for the people who make our garments.

Incidentally, the term is also used to describe the spiral of overproduction, overconsumption and the maddening fashion system (a topic to devote another backstory to, ed.).

Yet there seems to be a turnaround. “Consumer organisations, competitors or government bodies are increasingly taking regular action against misleading sustainability claims. The way to court is also found more often,” says Bussé.

Airlines taken to court for greenwashing: Stop ‘sustainable flying’ claims
Last June, a number of consumer organisations in Europe filed a joint complaint against 17 airlines that allow consumers to pay extra for a “greener” flight. “This is the first civil claim filed in the Netherlands based on greenwashing,” says Margot Span.

The court in Amsterdam will next consider the case of the FossielvrijNL foundation against airline KLM. Fossielvrij argues that KLM's advertisements and other marketing violate the EU directive on unfair commercial practices. “It is the first of its kind worldwide against the greenwashing of the airline industry,” the foundation reported in a press release in early June 2023.

Currently, by the way, it is not always easy to define greenwashing in legal terms, agrees Bussé. “Greenwashing is always a question of fact,” explains the Brussels lawyer. “That makes some say we are in a legal ‘grey zone’.” The good news is that “the use of vague terms will be restricted more than ever in the new regulations that are coming, though”.

Greenwashing to be curbed further

“We are moving in a direction where companies can no longer hide behind the vagueness of regulations,” Bussé ventures to say. “From Europe, numerous new instruments are arriving that provide a lot of clarity. Various national bodies also published guidelines to facilitate the interpretation and application of regulations.”

One such new tool is the “Anti-greenwashing law”, as the European Commission's bill is called, presented last March. If the new law is adopted, companies will no longer be allowed to make “general, vague environmental claims” such as “environmentally friendly”, “eco” or “green”. It will also become punishable to make a sustainability claim about an entire product when it only covers part or an aspect of the product. It also prohibits companies from using a voluntary sustainability label that is not based on verification from an external party or public authorities.

The proposal also focuses on tackling the proliferation of eco-labels. According to the Commission, some 230 different labels currently exist, leading to confusion and distrust among consumers. The proposal prohibits governments from establishing new labelling schemes unless they are developed at EU level.

The bill will be discussed in both the European Parliament and the European Council. If the proposal is approved by EU countries and parliament, the legislation will come into force within the European Union. (MEPs just voted in favour at the time of publishing, ed.)

 
 
Credits: Greenwashing. Illustration: Jackie Mallon
What about the fashion industry’s sustainability claims and greenwashing?

Sustainability is in fashion, but the fashion industry is generally not very sustainable yet.

Read all about it in this background article ‘How (not) sustainable is the fashion industry?’

“Sustainability claims and, unfortunately, greenwashing are therefore widespread in the fashion industry,” wrote lawyer Bussé earlier in a guest post for FashionUnited.

It is debatable whether there is such a thing as ‘sustainable fashion’ at all. The fashion industry calendar dictates that clothes and accessories do not have a long lifespan, Belgian sustainability expert Jasmien Wynants previously told FashionUnited. What is ‘in’ today will no longer be so in six months' time (or before that). After all, the industry exists by selling new garments.

In Belgium, the term “sustainable fashion” has been banned by local authorities. “They say, there is no such thing. Fashion cannot be sustainable,” Wynants told us. “The only thing you can use is ‘more sustainable fashion’, provided you explain very concretely what you mean by that and can prove it.”

It is good to realise that every new garment made and later purchased has an impact, even the more sustainable fashion items.

Sources:
- Input of lawyer Judith Bussé of the Brussels law firm Edson Legal, 29th June 2023. Bussé's expertise is on intellectual property and ESG-related regulation
- Input of Dutch lawyer Margot Span of Spargo Legal, 4th July 2023. Span’s expertise is on intellectual property and advertising law.
- Parts of this article text were generated with an automatic AI tool and then edited.
- Wikipedia page about “Greenwashing”, accessed on 29th June 2023.
- Article ‘Consumer protection: enabling sustainable choices and ending greenwashing’, by the European Commission, 22nd March 2023.
- European Commission study ‘Commission staff working document impact assessment report ‘Proposal for a directive of the European Parliament and of the council’, March 2020.
- Dutch encyclopedia Ensie.nl ‘greenwashing’, accessed 29th June 2023.
- Article ‘Case law: sustainability claims in advertising’ [in Dutch], a guest contribution by Köster advocates for FashionUnited, 17th Junie 2021
- FashionUnited article ‘H&M and Decathlon to adapt sustainability claims following report by Dutch watchdog,’ by Rachel Douglass, 13th September 2022
- FashionUnited article ‘Primark Nederland onderzocht vanwege mogelijke greenwashing’ [in Dutch], by Caitlyn Terra, 27th June 2023.
- Press release Primark NL sued over greenwashing, Whensarasmiles.nl, 26th June 2023
- Sara Dubbeldam | When Sara Smiles Instagram post, 28th June 2023
- Tijd.be article ‘Test-Aankoop verwijt Brussels Airlines 'greenwashing', Belga, 22nd June 2023
- Press release Fossielvrij NL ‘Greenwashing rechtzaak tegen klm mag doorgaan,’ 7th June 2023.
  - Europa Nu article ‘Vragen en antwoorden over de Europese groene claims’, courtesy of European Commission (EC), 22nd March 2023.
- Article ‘ESG in fashion (2) : the EU framework on greenwashing in the fashion industry’, guest contribution by Blanche Devos and Judith Bussé, lawyers at Crowell & Moring for FashionUnited, 18th November 2021.

Related news articles
 
 
First hearing of KLM lawsuit by Fossielvrij NL - 20th April 2023 Credits: Peter Valckx / Fossielvrij NL . Source: Press release Fossielvrij “Greenwashing lawsuit against KLM may proceed,” [in Dutch] 7th June 2023.
Other background articles:

This article was originally published on FashionUnited.uk. Edited and translated by Simone Preuss.

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