Sustainability is trendy. Amid shifting consumer sentiment and
mounting criticism in the press, international
legislation is forcing change in how companies make and market
their products.
On December 14, 2022, the Federal Trade Commission (FTC) voted
unanimously to update its Green Guides for the Use of Environmental
claims and announced that it was seeking public comment on the
subject. First introduced in 1992, the FTC Green Guides provide
guidance on avoiding unfair or deceptive environmental marketing
claims under Section 5 of the FTC Act, 15 U.S.C. § 45.
“People decide what to buy, or not to buy, for all kinds of
reasons. One of those reasons increasingly seems to be
environmental impact. Before making a purchase, many American
consumers want to know how a product contributes to climate change,
or pollution, or the spread of microplastics. Businesses have
noticed,” Lina Khan, Chair of the FTC, said in a statement. “Walk down the aisle at any
major store — you’re likely to see packages trumpeting
their low carbon footprint, their energy efficiency, or their
quote-unquote ‘sustainability.'”
Stressing the need for the Green Guides to “keep up with
developments in both science and consumer perception,” Khan
said the FTC was especially keen to receive comments on
“relatively emerging environmental topics.” Comments
remain open until February 21, 2023, though the Consumer Brands
Association has requested a 60-day extension on behalf of
itself and various other trade groups.
Tougher marketing guidelines are imminent in the European Union,
too. Under the Strategy for Sustainable and Circular
Textiles, which the European Commission adopted last year, the
EU has been steadily hammering out new legal requirements related
to sustainable business practices and increasing transparency in
manufacturing and marketing.
“There’s not a lot of time. And I’m not sure that
people realize how quickly the clock is ticking,” said James
Fallon, editorial director at Women’s Wear Daily, in an
interview for Katten Kattwalk and Kattison
Avenue. He said fashion companies appear slow to appreciate
the imminence and strictness of upcoming requirements. “I
think they’re moving, but I’m not sure that they’re
moving as rapidly as they need to be,” he said. Much of the
industry, he added, “tends to focus on what each individual
company is doing in its own bubble” rather than on the multi-
year process of moving from the raw materials stage to product
design to sales. Yet that timeframe, he suggested, adds urgency to
any changes in business practices and marketing.
“You’re really looking at a pipeline that’s
probably going to take you well into 2025, and we’re in
2023,” Fallon said.
Of course, to stop “greenwashing,” which the EU has defined as “companies giving a
false impression of their environmental impact or benefits,”
businesses first need to take stock of their ecological
footprint.
That’s easier said than done. How much of a garment must be
made of recycled fibers for a company to tout its greenness? Is
accepting the return of old clothes or adding a resale category
inherently sustainable? And is farming exotic animals for leather a
boon to biodiversity and better for the environment than faux
leather — or a step in the wrong direction on both
accounts?
The fashion industry can’t afford to be passé, but
claiming the moral high ground requires a nuanced analysis of the
issues. Here, we look closely at several key legal and business
debates.
A Global Attack on Misleading Green
Claims
The term “greenwashing” is said to have originated in
the mid- 1980s, when an environmentalist wrote an essay criticizing
hypocritical practices in the hotel industry. These days,
greenwashing is everywhere — in advertising and law.
In the US, current FTC guidance addresses general environmental
benefit claims (such as “green” and
“eco-friendly”); the use of seals and certifications that
provide, or appear to provide, an endorsement of a product’s
environmental bona-fides; claims about waste (such as
“recyclable”); claims about a product’s impact or
toxicity (such as “non-toxic” or
“ozone-friendly”); and claims about the impact of
manufacturing (such as “made with renewable energy” or
“carbon neutral”).
Updates will likely address claims related to carbon offsets and
the thresholds guiding marketers on claims that products are
“recyclable” or made of “recycled content.”
The EU Commission has introduced several amendments to the Unfair Commercial Practices Directive, which,
if adopted, will prohibit companies from making vague,
unsubstantiated claims about environmental performance and using
eco-labels on products that are not either government-issued or
based on third-party verification. Such practices would be part of
the commercial practices “blacklist.”
In an attack on planned obsolescence, proposed amendments to the
Consumer Rights Directive would require
consumers to be “informed about the guaranteed durability of
products” and sellers to “provide relevant information on
repairs” and, where applicable, software updates. The
Commission is also drafting revisions to the EU Waste Framework Directive to improve
management of textile waste, in keeping with the EU Strategy for
Sustainable and Circular Textiles.
The proposed amendments require the approval of the Council of
the European Union and the European Parliament to become law.
Various European countries have also been implementing green
laws at the national level. France’s Anti-Waste and Circular Economy law went into
effect on January 1, 2020, cracking down on single-use plastics and
misleading environmental claims in marketing. Effective January 1,
2023, Germany introduced granular supply chain reporting
requirements for companies doing business in the country under its
Supply Chain Due Diligence Act.
Sergio Tamborini, president of Sistema Moda Italia (SMI),
Italy’s fashion and textile trade federation, which represents
an estimated 50,000 companies and nearly 400,000 employees, said
during an interview that the textile industry is facing
“increasing market and government pressure to guarantee
transparent information about its environmental impact.”
“It’s a paradigm shift, from a commercial view of
sustainability to a mission that encompasses all facets of a
business, from governance and compliance to ethics,” he said.
He highlighted the Italian fashion industry’s recent efforts to
use blockchain technology to trace products back to their original
batches, improving supply chain transparency and boosting the
profile of “Made in Italy” as shorthand for quality and
ethics. Italy’s Ministry for Economic Development has worked
with SMI on implementing the new technology throughout the textile
sector; ICE, the Italian Trade Agency, introduced its TrackIT
blockchain program in 2022.
“Traceability across the entire supply chain helps fight
greenwashing,” Tamborini said, noting Italian fashion
companies that are implementing sustainable practices perceive
greenwashing as a form of unfair competition.
Is Secondhand Fashion Green?
The fashion industry is reckoning with the remorse many
consumers feel when purchasing disposable apparel and accessories.
In a 2022 report by resale platform ThredUp, focused
on Gen Z (roughly speaking, the cohort of individuals now aged 16
to 26), 72 percent of those polled admitted to shopping for fast
fashion over the past year. Yet most expressed a desire to shop
more sustainably, citing an awareness of the environmental impact
of manufacturing and an interest in supporting more
“ethical” brands.
For some businesses, the uptick in consumer interest in
sustainability has prompted an investment in resale, with secondhand shopping
marketed as a guilt-free way of scratching the fashion itch. But to
avoid claims of “greenwashing,” companies should tread
carefully.
“Brands have to find their unique point of view for
launching resale, ‘sustainability’ just doesn’t cut
it,” said Graham Wetzbarger, founder and chief executive
officer of Luxury Appraisals and Authentication LLC, which advises
companies and investors on authentication best practices. Instead,
he said, companies need to connect resale to their specific
mission, focus and clientele, whether by offering archival pieces
or a lower price point for aspirational customers.
Fashion businesses making green claims related to resale must
also contend with the environmental impact of product packaging and
transit. “Currently, the logistics behind shipping and
processing resale merchandise nullifies any carbon savings from not
having to manufacture a new garment,” Wetzbarger told us.
Further, resale comes with two kinds of authenticity concerns:
product and branding. On the one hand, counterfeit merchandise has been a recurring
legal headache for secondhand retailers. On the other, consumers
are sensitive to any whiff of inauthenticity in marketing, especially when it
comes to environmental claims. A study by the UK’s Advertising Standards Authority found that
“the tendency for brands to declare their environmental
achievements” elicited cynicism in many participants.
“Authenticity is extremely important for trust
building,” said Wetzbarger, suggesting that fashion designers
and manufacturers should “start incorporating sustainable
second life assets to their products,” including
“dissolvable thread, easily removable hardware elements,
single fiber fabrics, and removable dyes.”
Repair services are another possibility. Companies that approach
resale with an eye on authenticity will have an easier time making
accurate claims about the sustainability of their products.
Are Exotic Skins Sustainable? Will California Ban
Them?
On January 1, 2023, California’s contentious ban on the sale
and manufacturing of new animal fur products, Assembly Bill 44, took effect. California is not an outlier:
many European countries have banned fur farming, and in June 2021,
Israel became the first country to ban the sale of animal
fur.
Over the past several years, luxury fashion has scurried away
from the use of fur, largely in response to a change in consumer perception — and to the
effectiveness of social media campaigns. For many brands, any
loss in fur-related revenue pales in comparison to the goodwill
generated by going fur-free.
The global fur industry has sought to counter this narrative by
emphasizing that fur is a natural, and therefore more sustainable,
product than fake fur, an argument also present in the market for
exotic leathers, such as alligator, crocodile, python, lizard and
ostrich skins. In September, Business of Fashion highlighted
“a marketing battle that stretches from leather to diamonds as
sustainable fashion becomes big business and upstart alternatives
challenge established materials.”
California enacted an amendment to Penal Code § 653o, a ban on exotic skins,
in 2020, but the statute has been ensnared in legal challenges
since 1970, with plaintiffs asserting that it is pre-empted by
federal regulations. The subject continues to provoke feverish
discussions between animal rights and environmental organizations,
such as the Center for Biological Diversity and Human Society of
the United States, on the one hand, and stakeholder groups such as
the Louisiana Department of Wildlife and Fisheries, on the
other.
Bruce Weissgold, an independent consultant who spent 25 years
working at the US Fish and Wildlife Service (FWS), told us that
debates surrounding the ethics and sustainability of farming
crocodiles, alligators and pythons, in particular, have “been
raging for decades,” with one side adopting the precautionary
principle — “don’t harvest unless you can
demonstrate that it’s not detrimental to the species in the
wild” — and the other side promoting “sustainable
utilization.”
Weissgold said the acquisition by some major fashion companies
of alligator and crocodile farms — partly a reaction to
trafficking concerns — has improved transparency in the
supply chain for those particular skins. As a whole, however,
“I don’t think there’s a lot of interest right now in
developing a traceability system for exotic reptile skins,” he
said, notwithstanding the Convention on International Trade in Endangered
Species of Wild Fauna and Flora.
The treaty requires exotic crocodilian skins to be tagged to
move across borders. “In the US, we supply the tags to the
state wildlife agencies, who sell them to hunters and alligator
farms. The tag is supposed to be applied at the point of
harvest,” he explained. But applying tamper-proof tags that
will survive the leather-tanning process is no mean feat, and
Weissgold suggested that people are adept at manipulating tags.
While FWS officials examine permits and tags before clearing
exotic skins for import and export, “at best, all those
regulation and enforcement efforts are keeping the trade majority
legal,” he said, because “smart traders can take
advantage of weak enforcement.” In his estimate, that makes a
holistic view of the ethics and sustainability of exotic skins
almost impossible.
Fashion brands should heed changes in consumer perception of
this product category, as well as supply chain risks associated
with sourcing exotic leathers, cautioned PJ Smith, Fashion Policy
Director at the Humane Society of the United States. In the last
five to ten years, he said, surveys consistently show high consumer
engagement with animal welfare, especially for Gen Z, and “the
perception of luxury has changed to being what is more sustainable,
what is more innovative, what is more ethical.”
Fur and exotics are “just not where consumers are
anymore,” he said, adding that various well-known retailers
“are looking to get out of exotic skins,” meaning
“the markets are closing.”
Still, he expressed frustration that exotic skin bans have yet
to get the traction seen with fur. “For five-plus years, there
was a fur-free announcement every quarter, and we just haven’t
seen that with other materials — down or exotic skins —
but I always thought exotic skins were next, primarily because
these are wild species, similar to fur, and no one’s eating the
pythons or crocodiles, so it’s not considered a by-product of
meat production. And it’s a huge risk to the brands because of
the illegal wildlife trade,” Smith said.
Back in California, legal developments are pending in two cases,
April in Paris v. Becerra1 and Louisiana
Wildlife and Fisheries Commn. v. Becerra2,
centered on the constitutionality of California’s exotic skins
ban. Lawyers for plaintiffs and defendants presented oral arguments
on the merits last spring.
A Changing Storefront
Market economies struggle with externalities such as the
negative environmental costs of fashion. As new legislation
addressing sustainability claims and practices goes into effect,
consumers may soon find “walking down the aisle at any major
store” — to quote Khan from the FTC — a starkly
different experience.
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Footnotes
1 April in Paris v. Becerra, 219CV02471KJMCKD,
2020 WL 2404620 [ED Cal May 12, 2020].
2 Louisiana Wildlife and Fisheries Commn. V. Becerra,
219CV02488KJMCKD, 2020 WL 2404830 [ED Cal May 12,
2020].
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