Blog By: Abigail Barford
According to the United Nations Environment Programme “[t]he total number of climate change court cases has more than doubled since 2017” and continues to grow worldwide.[i] In recent years, the fashion industry has been subject to extensive global litigation regarding consumers’ environmental concerns.[ii] Specifically, as society has become more concerned with climate change and sustainability, there has been “an increase in ‘greenwashing’ claims directed towards fashion retailers.”[iii]
Consumers are demanding transparency regarding company procedures that address “environmental, social, and governance (‘ESG’) elements of their businesses.”[iv] ESG elements refer to “factors which make up part of a company’s non-financial performance indicators” often seen in “marketing, pre-initial public offering (‘IPO’) statements, and government filings alongside sustainability, environmental impact, and ethical social and business practices.”[v]
The lack of uniformity in ESG standards have incentivized companies to advertise using broad environmental buzzwords rather than supplying consumers with accurate, transparent information regarding the company’s environmental impact.[vi] In most cases, a retailer is “greenwashing” if its public marketing or product labeling includes misleading or inaccurate representations made strategically to please “environmentally conscious consumers.”[vii] More broadly, greenwashing occurs when companies mislead consumers “about the environmentally beneficial nature of their products, services, or their business generally.”[viii]
There are several recent, noteworthy cases alleging greenwashing, particularly against some of the largest companies in the fashion industry. In the ongoing issue of Commodore v. H&M, a class of Plaintiffs filed suit in 2022 “against Swedish fashion giant H&M over its use of Higg Sustainability labels on garments.”[ix] As basis for the suit, H&M launched an “H&M Conscious Collection,” where the company charged higher prices because they advertised the garments as “sustainably made,” as indicated by H&M’s use of the Higg scorecards.[x] However, Plaintiffs argue the Conscious Collection is no better for the environment than the ordinary garments sold at H&M.[xi] Regardless of the Southern District of New York’s decision,[xii] the message from consumers is clear: companies who promise sustainability should prove it.
In the 2021 class action Dwyer v. Allbirds, Inc., Plaintiff alleged Allbirds, a “sustainable wool footwear company,” used “false, deceptive and misleading” marketing for their shoes.[xiii] Allbirds represented that its production practices were environmentally safe.[xiv] However, Plaintiff discussed the “inherent dangers of large-scale wool production, to the animals[,] . . . . surrounding ecosystems and communities.”[xv] Despite the allegations, in 2022, the Southern District of New York granted Allbirds’ motion to dismiss for several reasons, including the Court’s conclusion that Allbirds’ “statements, advertisements, and practices relating to the Product are not materially misleading.”[xvi] Allbirds was adequately transparent with the public by publishing its carbon footprint, a life-cycle analysis, and environmental impact based on the Higg Material Sustainability Index.[xvii]
In a 2021 class action, Lee v. Canada Goose, Plaintiff’s greenwashing claims partially survived Defendant’s motion to dismiss.[xviii] The motion to dismiss was denied regarding claims concerning Canada Goose’s sustainability representations because “a New York judge agreed with Lee that the brand’s statements may be misleading to consumers.”[xix] Plaintiff emphasized that Canada Goose is capitalizing on the fact that consumers are more likely to purchase products produced ethically.[xx] It is problematic for consumers that Canada Goose’s product tags indicate the item’s coyote fur was sourced ethically when the company used inhumane trapping practices to obtain it.[xxi]
The increase in climate-centric and greenwashing litigation should serve as a warning to the fashion industry. As environmental awareness expands globally, fashion companies marketing its products as “sustainable” or “eco-friendly,” should consider the probability or success of greenwashing claims brought against them for doing so.[xxii] As the Court in Dwyer v. Allbirds explained, “New York courts apply an objective standard in determining whether acts or practices are materially deceptive or misleading: whether the alleged act is ‘likely to mislead a reasonable consumer acting reasonably under the circumstances.’”[xxiii]
There are several avenues for fashion brands to defend against greenwashing claims. First, companies should carefully consider using environmental language in marketing, “especially if they are making very specific claims” concerning sustainability.[xxiv] Also, using “wide-sweeping” or unnecessarily broad language can lead to litigation if the company does not produce “concrete evidence and independent verification” to support any sustainability-related claims. Therefore, the fashion industry should be honest by “validating their claims on company promotional material, websites, or product labels.”[xxv] Additionally, fashion companies should consider expanding their legal departments to include an ESG-focused team prepared for the scrutiny that follows using sustainability as a sales tactic.
Ultimately, as these issues continue to develop through consumer awareness and increased accessibility of environmental science, it is inevitable that the fashion industry will continue to defend against ESG and greenwashing claims. As fashion brands continue to expand and produce, the industry should consider the effects of this development to protect themselves from future litigation, which is typically a lengthy and costly process for all parties.
[i] Climate Litigation More Than Doubles in Five Years, Now a Key Tool in Delivering Climate Justice, U.N. Environment Programme (July 27, 2023), https://www.unep.org/news-and-stories/press-release/climate-litigation-more-doubles-five-years-now-key-tool-delivering [https://perma.cc/APZ5-M7F2].
[ii] Amy Albanese et al., Out of Vouge: Greenwashing Litigation on the Rise for Fashion Retailers, JD Supra (Jan. 24, 2023), https://www.jdsupra.com/legalnews/out-of-vogue-greenwashing-litigation-on-1640005/ [https://perma.cc/235J-N6G3].
[iii] Id.
[iv] The In-House View: ESG Among Companies’ Top Five Legal Risks, The Fashion Law (Sept. 27, 2023), https://www.thefashionlaw.com/the-in-house-view-esg-among-companies-top-five-legal-risks/ [https://perma.cc/RY3B-8BMG].
[v] Environmental, Social, and Governance, The Fashion Law (Oct. 1, 2023), https://www.thefashionlaw.com/resource-center/environment-social-and-governance/#:~:text=Environmental%2C%20Social%2C%20and%20Governance%20(,ethical%20social%20and%20business%20practices [https://perma.cc/5SNT-9W5L].
[vi] Id.
[vii] Albanese, supra note 2.
[viii] Jacob H. Hupart et al., Greenwashing Class Action Litigation: An Emerging Risk for Companies’ Claims of Sustainability, The National Law Review (Aug. 4, 2023), https://www.natlawreview.com/article/greenwashing-class-action-litigation-emerging-risk-companies-claims-sustainability [https://perma.cc/8846-MR28].
[ix] Albanese, supra note 2.
[x] Id.
[xi] Id.
[xii] Commodore et al v. H&M, Case No. 7:22-cv-06247 (S.D.N.Y. July 22, 2022).
[xiii] Environmental, Social, and Governance, supra note 5.
[xiv] Id.
[xv] Id.
[xvi] Dwyer v. Allbirds, Inc., 598 F. Supp. 3d 137, 154 (S.D.N.Y. 2022).
[xvii] Hupart, supra note 8.
[xviii] Lee v. Canada Goose US, Inc., 20 Civ. 9809 (VM) (S.D.N.Y. Jun. 29, 2021).
[xix] Environmental, Social, and Governance, supra note 5.
[xx] Id.
[xxi] Hupart, supra note 8.
[xxii] Albanese, supra note 2.
[xxiii] Dwyer v. Allbirds, Inc., 598 F. Supp. 3d 137, 149 (S.D.N.Y. 2022) (citations omitted).
[xxiv] Albanese, supra note 2.
[xxv] Hupart, supra note 8.