Walmart, Kohl’s Respond to FTC’s $5.5M Penalty for ‘Misleading’ Eco Claims
The Federal Trade Commission is cracking down on greenwashing in product advertising, with Walmart Inc. and Kohl’s Corp. the subject of the latest offense.
On April 8, the FTC issued court order penalties to Kohl’s for $2.5 million and Walmart for $3 million, regarding “bamboo” and eco claims they determined were misleading to consumers.
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“Kohl’s and Walmart are paying millions of dollars under the FTC’s Penalty Offense Authority for mislabeling their rayon products as bamboo,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said. “False environmental claims harm both consumers and honest businesses, and companies that greenwash can expect to pay a price.”
Specifically, the FTC said some items advertised by the retailers as “bamboo” were actually made of rayon (or viscose, the generic name for the manufactured fabric made through regenerating wood pulp, sometimes bamboo, in a chemically intensive process). According to separate FTC settlements, the companies’ representations were deemed “misleading” and thus in violation of the FTC Act and the Textile Act, which necessitates disclosure of both fiber content and use of generic fiber names.
The FTC went further to say Kohl’s and Walmart engaged in deliberate “greenwashing” by making misleading eco-friendly claims for a number of soft goods.
Charges against Kohl’s involved sheets, pillows, bath rugs and towels made with rayon instead of “wholly or in part from bamboo,” as advertised. Claims such as “sustainable,” “highly renewable” and “environmentally friendly” were used in the advertisements, as were callouts for “Cleaner Solutions,” in a sustainability seal that linked customers back to a sustainability webpage describing the company’s latest initiatives.
In response, a Kohl’s spokesperson said simply: “We have reached a settlement with the FTC and continue to take these regulations seriously.”
As for Walmart — the FTC targeted sheets, towels, blankets and nursing bras for misleading marketing and false bamboo claims. The retailer marketed the items, in some cases, as eco-friendly, sustainable and renewable.
“We are committed to being the most trusted retailer and take these claims seriously. We hold ourselves accountable when issues like this are raised,” Randy Hargrove, a spokesperson for Walmart, said Monday. “We have worked to strengthen our product description programs and expect our suppliers to provide products that comply with all laws, including those around labeling. We value our relationship with the FTC and are pleased we could work with them to resolve these issues.”
Walmart has been in the hot seat on other fronts, including with the state of California, which sued the retailer for unlawful dumping in 2021.
Along with the penalties, the FTC ruled the companies must stop making future unsubstantiated green marketing claims.
While this isn’t the first time fashion has been called out for potentially mislabeling textiles, it likely won’t be the last, either. More than a decade ago, the FTC sent warning letters to 78 companies, including retailers like Amazon Inc., Walmart, J.C. Penney Co. Inc., Target Corp. and Bed Bath & Beyond, brands such as REI, Hanes and The Gap, as well as department stores like Kohl’s, Barneys New York, Bloomingdale’s and Macy’s Inc.
The letters reminded the companies of the requirements for proper labeling and advertising of textile products derived from bamboo, as well as reiterated the penalties for mislabeling.
The FTC said it will “revive” a number of penalty offenses issued in the 1970s and 1980s, including those related to the textile industry.
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