How Greenwashing Scrutiny Is Changing the Way Brands Communicate

Click here to read the full article.

H&M Group would be the first to admit that 2022 was a challenging one for making green claims.

But despite the brickbats—and there have been plenty—the Swedish retailer is “more committed than ever” to maintaining transparency as a “key” part of its sustainability strategy, Anna Eklöf Asp, its global transparency lead, said at a briefing on its latest sustainability disclosure last week.

“This year, the fashion industry has faced increasing scrutiny over sustainability claims,” she said. “The debate around the way brands work with transparency has never been bigger, but we welcome this and see this as a great opportunity for change. Our goal is to be a leader within transparency, and our intention is as always been to provide credible and trusted data to our customers and stakeholders to enable informed decisions.”

“Conscious Choice,” the label that H&M used to indicate products that included at least 50 percent “more sustainable” materials, such as recycled polyester or organic cotton, has “played an important role” in helping customers make better decisions over the past decade, Asp said. Because of issues raised by Dutch regulators and others regarding the “clarity of sustainability communication,” the fast-fashion chain decided to phase it out in September. The European Union’s proposed directive on substantiating green claims, a draft of which was published last month, likely sealed its fate. If passed, corporations will no longer be able to say something is sustainable without robust scientific evidence. Nor will they be able to “self-certify.”

Mothballing eco-edits like “Conscious Choice,” therefore, is just part of the compliance process. And the Mugler collaborator isn’t the only one to swerve away from what once was a popular marketing—and some say greenwashing—tactic.

“Labelling is a key way to convey messaging and therefore accelerate consumer-driven progress at the point of purchase, but the independent labeling market is saturated and the individual pieces no longer fit together,” Philippa Grogan, sustainability consultant at Eco-Age, told Sourcing Journal.

In December, Mango revealed that it would be “progressively replacing” its “Committed” tag with a QR code that redirects consumers to a website where more information about a product’s composition, design and production location can be found. It was doing so, it said, both “in advance of legislative requirements and in order to offer consumers more valuable information about its garments.”

Last month, Zara said it will retire the public face of its sustainability signpost, dubbed Join Life, and use it only as an internal standard. If legislation was a reason, the Inditex-owned retailer didn’t say. According to its 2022 annual report, which was published in March, 61 percent of Zara’s products complied with the Join Life standard last year, “amply exceeding” its commitment of 50 percent.

“We have therefore reached a point in the development of our strategy where it is no longer necessary to differentiate the products in our collections with this label,” it said.

Asos quietly removed its “Responsible Edit” indicator ahead of its investigation by Britain’s Competition and Markets Authority over potentially misleading claims. Zalando, less quietly, dropped its sustainability “flag” after a Norwegian jury presented the Berlin-based e-tailer with its inaugural grønnvaskingsprisen, or greenwashing prize, in October, though a “data transition and validation” transition was already in the works before that. Products with environmentally friendly attributes will soon feature a “tappable icon” that directs customers to more information, Christian Smith, head of sustainability stakeholder engagement at Zalando, previously told Sourcing Journal.

H&M will apply a similar strategy. Instead of the “Conscious Choice” banner, it will offer additional information about a garment’s material composition “with the purpose to make the communication more specific and clear,” Asp said. This includes certifications from the likes of the Global Organic Textile Standard and Textile Exchange, which it obtained in March after several rounds of auditing last year.

“It means that we have chain of custody of our products, strong social environmental practices and other attributes verified by an independent party,” she said. “We also continue the work that we started years ago with standardized impact data on products and we’re really happy to see the push the industry is experiencing right now.”

Asp allowed that the past year gave H&M “great learnings,” but that it still believes in shared verified impact tools such as the Sustainable Apparel Coalition’s Higg Materials Sustainability Index and the European Commission’s Product Environment Footprint, to “accelerate change.”

“While we acknowledge that the current transparency solutions and methods need further development, our experience also tells us that if we avoid taking imperfect steps because we are afraid of being criticized, there will be no steps at all within this area,” Asp said. “So we have to continue to be brave and try new things in order to find opportunities for progress.”

To PEF or not to PEF?

But whether the EU’s draft directive on green claims can deliver the “clear, harmonized” legal framework that Asp and others desire remains to be seen. Both environmental activists and trade groups say that the current version doesn’t go far enough, which risks muddying the landscape even further.

For Andrew Martin, executive vice president of the Sustainable Apparel Coalition, the failure of the European Commission to include the Product Environmental Footprint—or PEF—as a reference method, in a major shift from the leaked version, renders the proposal “short of its stated ambition to address greenwashing” and a “missed opportunity” for the European Union to be a global sustainability front-runner.

“The directive does not mandate a standardized and clearly defined framework based on scientific foundations and fails to provide the legal certainty for companies and clarity to consumers,” Martin wrote in an emailed statement. “This lack of focus has the potential to open the door to a range of varied and incomparable methodologies, risking undermining, rather than advancing, progress in the sector.”

The PEF has come under fire for being imprecise or insufficient in its approach. Writing in the draft proposal, the European Commission said that it does not currently cover impact categories such as durability, repairability, recyclability, microplastics and use of natural content, making it unsuitable as the sole method of substantiation.

“Addressing the very wide and fast-changing area of environmental claims by means of a single method has its limitations,” the draft said. “Prescribing a single method like the environmental footprint as the standard methodology of substantiation for all environmental claims would not be appropriate and pose a risk for companies not being able to communicate on relevant environmental aspects or performance in relation to their products or activities.”

For these reasons, and based on conversations with stakeholders and an internal assessment, the option of using one standard methodology to substantiate environmental claims was “not pursued,” the proposal said. “Instead, a more flexible approach based on the preferred policy option from the impact assessment developed for the green transition was considered appropriate.”

Martin said, however, that as science evolves, so too, will the tool, “constantly evolving, growing and strengthening to provide a more comprehensive picture of sustainability.”

George Harding-Rolls, campaign manager at the Changing Markets Foundation, a corporate watchdog group, agreed that the lack of a single substantiation method could create a “lot of confusing, competing tools to communicate claims.”

“The noted omission of the PEF as a single-approach to substantiating claims marks a backtrack from the Commission,” he told Sourcing Journal. “By not earmarking a specific tool, we risk a pick-and-mix of competing ways to back up green claims, creating more confusion and not less.”

Harding-Rolls was pleased to see, in the published version, the use of PET bottles in clothing highlighted as a specific example of a misleading environmental claim, which he said is a “promising warning to fashion brands.” Still, the draft directive stops short of outlawing claims by brands that using recycled PET for clothing, which critics regard as a circularity dead end, is better for the planet, though he noted that it isn’t the right platform for such a ruling anyway.

“The directive is more about addressing the methods to justify claims, rather than specific claims themselves,” Harding-Rolls said.

He said that the PEF is “far from perfect,” but with some work has the potential to address issues around end of life, circularity and microplastics, “all of which would make greenwashing around PET bottles to clothing less prolific in the fashion industry.”

Grogan disagrees, however. Eco-Age is the convener of Make the Label Count, a coalition of organizations that is critical of the PEF as a potential vehicle for greenwashing. The Changing Markets Foundation is also a member.

“We have seen a race to develop methodologies to streamline and simplify information presented to consumers: think Higg MSI, think Product Environmental Footprint, think external rating systems,” she said. “However, if inaccurate or incomplete, these initiatives stand to complicate and convolute things, amplifying confusion, derailing progress, and fast-tracking fashion’s negative impacts. This is why we cannot currently underpin policy with such datasets in their present state, and it is more accurate to communicate sustainability through more qualitative information.”

Grogan’s tips for brands who seek to avoid greenwashing: Stop using misleading, vague and unsubstantiated phrases like “good for the planet,” “green” and “eco-friendly,” which she says are almost completely meaningless. Rather than cherry-pick favorable attributes, communicate the complete picture and share both wins and learnings. Most of all, she said, companies should acknowledge that sustainability is a process that is constantly evolving, not a switch that they can flick on or off.

“Some things simply shouldn’t be deployed as marketing tools and are better placed to inform better business decisions rather than sway consumer decision-making,” Grogan said. “Not everything has to be a marketing tool.”

Cindy J. Lin, co-founder and CEO of Hey Social Good, a social-impact tech firm, says she hopes that a “required but generic” green claims directive will push companies to “come clean” with their “daring sustainably-focused practices.” At the same time, she’s worried about the possibility of more brands “greenhushing,” which is to say keeping silent about their efforts and accomplishments because they’re afraid of being called out or punished. So far, the draft proposal is leaving it to the member states to decide what penalties will be in store for infringing parties, though fines should amount to at least 4 percent of the offender’s total annual turnover, it suggested.

Companies need to share what they are doing so the industry can inspire collective progress, said Lin, pointing to a report by South Pole last year that found roughly one-quarter of 1,200 companies with a sustainability head keeping quiet about their eco-milestones on purpose. It’s a concerning trend, she said, but one that is avoidable.

“Greenhushing is worrisome because some fashion brands may fear a misunderstanding of their practices and thus, not share their sustainable efforts,” Lin told Sourcing Journal. “However, we observed that fashion brands who share their complete sustainable journey, including actions that worked and didn’t work, tend to have strong consumer support and understanding—the brand is on an educational journey with the consumer.”

With the draft directive pointing out that nearly half of the more than 230 eco-labels active in the EU have either weak or unexecuted verification, it’s “imperative” that all stakeholders work to support verification and label integrity, she said.

“In the absence of data-driven verification of a company’s practices, substantiation of claims, and transparent knowledge, we lose out on making progress on climate challenges and squander consumer’s trust in the market system,” Lin said.

The draft directive won’t be set in stone for a while. It still has to move through the European Parliament, where it will be put to a vote. The earliest it could go into effect is next year, with 2025 a more likely possibility. In the meantime, it will give brands plenty to chew on. With climate-related claims like “climate neutral,” “carbon neutral,” “100% CO₂ compensated” and “net zero by a certain year” now framed as potentially misleading, particularly if they’re buttressed by offsetting through carbon credits generated outside the company’s value chain, the way the industry communicates its environmental bonafides could soon look very different.

“We will continue adapting to the fast change in expectations on us,” Asp said at the H&M briefing. “The transparency landscape is evolving incredibly quickly at the moment, alongside the expectations on what it takes to be a leader, so we expect increasing scrutiny of our claims and our commitment and our reporting parallel with the new legislation that is coming within this area.”

Building robust data systems to replace H&M’s current approach is a challenge but also a high priority “in order to meet our ambitions,” she said.

“Having that said, we remain committed to adopting and learning and improving the way we work to strengthen our transparency,” Asp added.