Retail and fashion’s big greenwashing crackdown

Peter Jones

Managing Director, Founder

As regulators clamp down on misleading claims about sustainability, here’s a look at how some retailers mislead, and how others are trying to make a real difference in retail and fashion’s big greenwashing crackdown.

Prological’s Peter Jones spoke to Inside Retail about the good, the bad and the ugly of sustainability claims in the retail and fashion industries.

The rise of conscious consumption

Today, consumer behaviour is driven largely by choice: we have more options available to us, and easy access to information to decide which brands we will buy. Ultimately, we see products not only for their utility, but as a representation of our values, an extension of our core beliefs.
Conscious consumption is now more embedded than ever. Customers now consider environmental claims (about supply chains, energy efficiency, production methods and more) as major factors when evaluating products to buy.
As such, these claims have become a powerful marketing tool. Brands use them as a differentiator in the fight for customer loyalty and competitive advantage.

A global crackdown

With this in mind, the Australian Competition and Consumer Commission (ACCC) recently announced a crackdown on greenwashing as part of its priorities for 2022 and 2023.
In particular, the regulator plans to uncover misleading environmental and sustainability claims and bring action against companies that make them.
The ACCC considers greenwashing to be misrepresenting the extent to which a product or strategy is environmentally friendly, sustainable, or ethical.
The ACCC isn’t scrutinising the breadth or depth of green activities, but the clarity, accuracy, and disclosure of them.
Whilst some greenwashing is unintentional, usually from a lack of understanding about sustainability, it’s often done on purpose through targeted marketing and PR efforts.
Economically speaking, it leaves companies worse off, as sales drop when customers realise they’ve been misled. Socially, it leaves communities worse off, as people remain uneducated about how their purchases affect the environment.

How to spot it

Grandiose claims of sustainability have permeated almost every industry and fashion is one of the worst offenders. The sector is riddled with a lack of transparency and unethical supply chains, from mass produced fast fashion and high-end labels alike.
Despite investing in million-dollar marketing campaigns vowing to reduce their environmental footprint, many fashion brands rely on fossil fuel-based synthetic materials and are heavy transport users. The Human Rights Law Centre report Paper Promises? states that the industry is also under the most suspicion for unethical ‘sweatshop’ labour forces.
A report from the Changing Markets Foundation, titled Synthetics Anonymous: Fashion brands’ addiction to fossil fuels, states that 59 per cent of all green claims by European and UK fashion brands are misleading. Meanwhile, 66 per cent of consumers say they would pay a premium for sustainable goods and services (73 per cent among Millennials).
From luxury items to everyday household products, customers are misled often, in very simple ways. Products with green or neutral packaging are seen as more environmentally friendly than those with bright colours, and language on packaging with words like ‘earth’ ‘eco’ or ‘natural’ imply the product is better for the planet, when in fact it may not be at all.

Honest efforts

Zara, the global fashion brand, recently announced it was partnering with Renewcell for a capsule collection made with Renewcell product Circulose, a branded material produced from 100 per cent recycled textiles.
Global fashion retail giant H&M recently introduced its Better Denim collection, which it has also partnered with Renewcell to produce. The collection features an eight-piece men’s denim capsule that is created from 100 per cent textile waste.
Iconic jeans manufacturer Levi’s has also tapped Renewcell to introduce a new jean made with biodegradable Circulose material.
Fibres produced with Circulose help brands limit the use of virgin textile fibres, reducing the climate and environmental impact raw material production and waste cause.
While this process is likely to be labour and energy intensive and may have a whole host of downsides – including the transporting of returns, and the labour required to repurpose the fabric – once it reaches significant scale and volume, it could be a more sustainable option.
The impact of three global fashion brands all demonstrating a commitment to a closed-loop system and sending a message about sustainable practices should not be understated.
Elements of this initiative show the fashion industry is moving in the right direction and while this movement may not be more sustainable from the outset, it’s a creative solution that sends a powerful message to today’s consumers and has the chance to make a real difference.

It’s good to be (truthfully) green

In today’s world, it’s not the degree of effort companies make to improve their footprint that matters most, it’s the degree of transparency. Certainly, efforts at reducing negative environmental impacts should be recognised and celebrated, but only when they are based in truth.