In vogue? Green claims in fashion regulation, a growing trend

Driven by an increased focus on climate change and wider sustainability issues, recent years have seen a significant increase in environmental regulation across sectors and jurisdictions. Notably, governments and regulators have increased efforts to address concepts such as “greenwashing”, whereby firms overstate or are not clear about the eco-credentials of their products or services to consumers. One industry which has attracted significant scrutiny is the fashion industry.

As we will explore in this blog post, a number of European jurisdictions have taken action against large fashion retailers for alleged breaches of consumer law, and in particular, for making misleading green claims.  

Developments in the UK

In the UK, the Competition and Markets Authority (CMA) has authority to investigate potential breaches of consumer protection law and has focused heavily on ‘misleading’ green claims in the last few years. The Advertising Standards Authority (ASA) is responsible for regulating the content of advertisements, sales promotions and direct marketing in the UK. 

In 2021, the CMA published guidance on the use of green claims (the Green Claims Code), a resource for businesses to help to understand and comply with existing obligations under consumer protection law when making environmental claims, as discussed in more detail in this blog post. 

Following the publication of this guidance, the CMA undertook a broad compliance review of green claims in the fashion sector in 2022 and, in July of that year, opened formal investigations into ASOS, Boohoo and George at Asda. All three chose to give commitments to the CMA in March 2024 to bring the CMA’s investigations to a close, pursuant to which they agreed to modify the display, description and promotion of their green credentials, ensuring that green claims are accurate and not misleading, as outlined in this blog post. 

The CMA published further compliance guidance in September 2024, specifically for businesses in the fashion retail sector, as well as sending warning letters to a further 17, unnamed, fashion brands, advising them to review their practices. As discussed in more detail in our recent blog post, the guidance restates and expands upon the principles in the Green Claims Code and in the commitments decisions and applies to all businesses across the supply chain which make environmental claims about clothing, footwear, fashion accessories and related services (including packaging, delivery and returns), to ensure that any claims are accurate and substantiated.

The CMA’s eleven guiding principles for compliance are: 

1. make environmental claims clear and accurate; 
2. don’t hide important information; 
3. avoid using unclear terms; 
4. do not use imagery and icons in a misleading way;
5. ensure comparisons are clear; 
6. explain clearly any action a consumer needs to take; 
7. be clear when using product filters and other website navigational tools; 
8. product ranges must be aptly named with clear, explained criteria and not be marketed in a misleading way; 
9. describe fabrics clearly and precisely;
10. ensure affiliations and accreditations are not misleading and are supported by details, including if a claim is based on part of a product’s life cycle; and 
11. put in place processes to make sure that claims are accurate, including checking that suppliers or any relevant third-parties can also support their claims.

The CMA’s work in this area is supported by the ASA, which has also issued guidance on avoiding misleading environmental claims in advertising. However, it has not, to date, focussed its enforcement activity on the fashion sector.

Italy

The Italian Competition Authority (ICA) has also focused its attention on green claims in the fashion sector. Earlier this year, the ICA initiated proceedings against, and carried out inspections at the premises of, Giorgio Armani and Christian Dior for alleged breaches of the Italian Consumer Code in their advertising of clothing and accessories. Whilst not directly focused on green claims, the ICA is examining claims regarding craftsmanship and quality which may have been deceptive.

More recently, the ICA has launched an investigation into the entity which manages Shein's Italian website, for its allegedly deceptive environmental claims. In particular, the ICA is examining whether statements on Shein’s website could be seen to project an image of sustainable production by using generic, vague, and/or misleading environmental claims such as "circularity", which infer a degree of product quality and responsible consumption.  According to the ICA, Shein’s "sustainable" collection, “evoluSHEIN” may have misled consumers about the amount of "green fibres” within its products and failed to adequately clarify the true recyclability of the garments. The ICA has noted that Shein’s claims about its commitment to decarbonisation would be contradicted by the company’s 2022 and 2023 sustainability reports, which demonstrate an increase in greenhouse gas emissions. 

As with the Advertising Standards Authority in the UK, green claims can also be investigated by the Italian Advertising Self-Regulation Institute (IAP). The IAP ensures that commercial communications are "honest, truthful, and fair” whilst safeguarding consumer interests. The IAP enforces its Code of Self-Regulation, which includes specific provisions on green claims, and binds companies that have either directly accepted it, or indirectly accepted via their trade associations or advertising contracts. 

Germany 

Unlike the UK and Italy, Germany has predominantly relied on private enforcement to combat greenwashing. Germany does not have a regulatory authority for advertising, nor do its competition authority or other public bodies have an enforcement mandate for green claims. 

However, Germany is far from being a greenwashing safe haven. NGOs and consumer protection associations have been committed to fighting greenwashing for years, leading to significantly more cases than in other European jurisdictions. They have taken action against various companies, including in the fashion sector where they have targeted a variety of companies from Adidas to Shein. As in other industries, claims such as "climate neutral", “environment-friendly”, and “sustainable” have been challenged. 

Many cases have been settled out of court due to the eventual compliance of the fashion companies involved, highlighting the power of Germany’s consumer and environmental protection associations. 

In some cases, companies initially refused to comply but the associations were successful in court (although we are not yet aware of any higher instance decisions relating to the fashion industry). 

The Netherlands

The fashion industry has also recently faced significant scrutiny in the Netherlands. In 2023, the Authority for Consumers and Markets (ACM) updated its guidelines on sustainability claims, which now include general requirements of clarity, accuracy, specificity, and for all sustainability claims to be supported by facts. 

Following an investigation into ten clothing companies in 2022, the ACM found that Decathlon and H&M had violated its guidelines by making vague and/or misleading sustainability claims. Consequently, both companies, among other things, committed to amending their green claims practices, which included modifying or ceasing to make certain claims on both their clothing labels and websites.

Additionally, a successful greenwashing complaint was lodged with the Dutch Advertising Code Committee against Primark. Although non-binding, its decisions are generally respected. 

However, unlike the aviation industry, for example, there have as yet been no known court proceedings against the fashion industry for greenwashing.

Taking stock of enforcement in this sector

As the above snapshots make clear, there has been a marked increase in enforcement actions being brought against fashion companies for ‘greenwashing’ across Europe. 

This trend is likely to continue, with the Committee on Consumer Policy (CCP) of the OECD (which comprises over 35 members including the EU, UK, Germany, Italy and the Netherlands), recently adopting a Declaration on Protecting and Empowering Consumers in the Digital and Green Transitions and the upcoming transposition of the new EU Directive on Empowering Consumers for the Green Transition in EU member states.

As is clear from the above, companies active in the fashion sector, which often have multinational operations, should be mindful of their green claims as they risk enforcement action in a number of different jurisdictions. There are no safe harbours – enforcement has been directed at the full spectrum of retailers, from high-street and luxury goods to producers of “fast fashion” (although, perhaps unsurprisingly, large retailers have borne the brunt of the enforcement action so far). 

In many jurisdictions, there are multiple methods of enforcement, and stakeholders should be aware of other regulatory bodies which may be able to investigate green claims, such as advertising bodies in the UK, Italy and the Netherlands. 

Even in jurisdictions which have focused on private enforcement such as Germany, fashion companies face significant risks.

What’s next?

EU member states are required to transpose the new EU Directive on Empowering Consumers for the Green Transition into national law by spring 2026. The new rules require significant changes to national anti-greenwashing rules, but do not cover enforcement and member states will still have to determine the consequences of non-compliance themselves.

Authorities’ enforcement powers will be further bolstered when the EU’s Green Claims Directive has finished working its way through the legislative process. The Directive will establish minimum criteria that companies must meet when making claims to EU consumers about the environmental benefits and performance of their products or services (i.e. substantiation, communication and verification of environmental claims). It also sets minimum criteria for environmental labelling schemes. 

In the UK, the Digital Markets Competition and Consumer Act 2024 will take effect from early 2025 onwards and will confer on the CMA far stronger enforcement powers than it currently has. These new enforcement powers will be broadly equivalent to its competition enforcement powers, including the power to impose significant financial penalties. 

In summary, it is clear that the fashion industry is the subject of increasing regulatory scrutiny, with authorities increasing enforcement whilst broadening their powers of enforcement. If making any claims related to sustainability, fashion stakeholders at all levels of the supply chain are encouraged to consider their compliance sooner rather than later.