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Why H&M, Asos and Zalando Should Be Worried About ‘Radical’ Green Claims ‘Crackdown’

The demise of H&M’s “Conscious Choice” label is, most likely, only the beginning.

According to a leaked draft of a European Union proposal aimed at quashing unsubstantiated sustainable product claims, member states must put in place a system of authentication carried out by “independent verifiers.” Instead of nebulous terms like “green,” “eco,” “environmentally friendly” and, yes, “conscious,” companies will have to prove their bonafides against a standard, science-based methodology such as the bloc’s own Product Environmental Footprint (PEF), which assesses the impact of a good or service based on more than a dozen criteria, including ozone depletion, water pollution and climate change.

“Consumers lack reliable information about the sustainability of products and face misleading commercial practices like greenwashing or the lack of transparency and credibility of environmental labels,” a draft of the green claims directive said. “By fighting greenwashing, the proposal will ensure a level playing field for businesses when marketing their greenness.”

What this means for fashion is that virtually no in-house eco-designations currently in use—not H&M’s “Conscious Choice,” not Asos’s “Responsible Edit,” nor Zalando’s sustainability “flag”—will be allowed to stand, said Baptiste Carriere-Pradal, chair of the Policy Hub, a think tank founded by the Sustainable Apparel Coalition, Global Fashion Agenda and the Federation of the European Sporting Goods Industry, as well as chair of the technical secretariat involved in the PEF rollout.

Because any future claim must take into account the entire life cycle of say, a T-shirt or pair of jeans, “by default,” any claim that does not track a product from the cradle to the grave is verboten, he told Sourcing Journal. Neither will brands be able to say that a product is sustainable because of a single positive attribute—the presence of recycled materials, for instance, or the fact that it’s made with vegan leather and therefore cruelty-free. For the European Union, it’s a minimum of three of the most relevant impact categories, again as laid out in a benchmark based on scientific consensus, like the PEF, or bust. And if a product has a positive impact in one area but an negative one in another, that has to be declared, too.

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“Just this section already removes a lot of claims,” said Carriere-Pradal. “It’s radical. The way that the industry will communicate about its impact, the way that it provides consumers with information to identify products with the lowest impact, this approach will radically change. You [must] have the full picture.” The only exceptions, he noted, might be “official” eco-labels such as the Nordic Swan and EU Ecolabel, which are backed and boosted by government entities. That will remain to be hammered out.

Such a reckoning has been a long time coming, the draft said. One 2020 study conducted by the European Commission found that more than half—53.3 percent, to be exact—of the environmental claims being made across the bloc were providing “vague, misleading or unfounded” information about the products’ environmental characteristics across a wide range of categories. In a sweep of websites by the Consumer Protection Cooperation Network the same year, authorities had “reasonable doubts” that 42 percent of the 344 sustainability claims they examined were false or deceptive. In 57.5 percent of the cases, they said, the trader did not provide “sufficient elements” to judge the claim’s accuracy. Officials also had trouble identifying whether the claim covered the whole product or only one of its components (50 percent), whether it related to the entire company or only certain products (36 percent) and to which stage of the product’s life cycle it referred (75 percent).

The official version of the proposal, which has been delayed several times, is set for release at the end of the month, at which point it will head to the European Parliament to be put to the vote. The earliest the measure could go into effect would be 2024, with 2025 also a distinct possibility.

Companies don’t necessarily have to use the PEF to justify their assertions, though the draft says that employing the framework creates an “assumption of compliance,” said Carriere-Pradal. Environmental claims based on an aggregated indicator, however, must be substantiated by EU, national or PEF category rules, per the document. Whether these provisions stay in the final document remains to be seen, he added.

One thing Carriere-Pradal says he’s sorry to see is that the green claims directive is exactly that—a directive, meaning that member states have a certain latitude to adjust the rules as they see fit. This “goes completely against the common market,” he said, since there’s the risk that data could be validated in one country but not another.

“We were keen to say that in the EU, if somebody wants to talk about the impact of a product, we should allow a consumer to be able to compare—hence, it should be one common method used, but that is not necessarily reflected in the document,” he said. “There is a high risk that consumers may have an impact calculated in two different ways; both sound but not comparable. Yet for the consumer, it’s impossible to make this distinction. And that’s probably another risk that we don’t see the draft preventing at all.”

In other words, a claim made in Berlin should use the same methodology as the same one in Paris, Carriere-Pradal said.

A common approach

This is something that Andrew Martin, executive vice president at the Sustainable Apparel Coalition (SAC), the sustainability trade group behind the Higg Index suite of tools, including the Materials Sustainability Index (MSI), agrees with.

“I think we’re at a point now where we need the regulation,” he told Sourcing Journal. “And I think it’s absolutely critical to have a common, scientific-based approach. I think it has to be harmonized, and the EU has the opportunity to do that on a big scale.”

Before the PEF’s arrival, the Higg MSI was framed as an industry solution for assessing the environmental footprint of fashion’s favorite materials. Last summer, however, complaints about the accuracy of its scoring system exploded into a larger debate about how data, when clumsily applied, could mislead consumers into thinking one product is better for the planet than it actually is. Norrøna, an outdoor wear brand that used MSI data to play up the virtues of its organic cotton T-shirts, was accused by Norwegian regulators of “breaking the law.” H&M was warned against doing the same with its “Conscious Choice” range. The SAC ultimately suspended its Transparency Program, which provided a visual guide to the impact of various clothing items, and placed the Higg MSI under review with the help of KPMG. The review, which will focus on whether the tool is aligned with the technical standards that guide life-cycle assessment, should be complete by June.

While the green claims initiative won’t directly affect the Higg MSI review, Martin said, the SAC is “actively working” on aligning it with the PEF “as the most holistic, scientifically grounded method for assessing the environmental impact of a product.” This would mean some technical changes. Currently, the Higg MSI calculates impact in four categories: global warming, eutrophication, water scarcity and abiotic resource depletion/fossil fuels.

The biggest challenge with not having a single interpretation of what counts as greenwashing is that brands have to constantly adjust their communication strategy based on the market, said Martin.

“It really almost risks paralyzing brands with inaction, because they’re not quite clear what to do,” he said. “And it stops companies from stepping their game up.” Increased scrutiny isn’t a bad thing, but without a common approach from a regulator perspective this will only “hold the industry back.”

“I think we need to have a need to be able to be clear about who we are [and] what we’re doing because that helps avoid a lot of the very clear misinformation and misunderstanding that’s out there,” he said.

European Union
EU member states must put in place a system of authentication carried out by “independent verifiers,” a draft of the green claims directive says. Getty Images

Making the label count

Like the Higg MSI, the PEF has its detractors. Among them is Dalena White, secretary-general of the International Wool Textile Organisation and spokesperson for Make the Label Count, an initiative that claims that the current framework gives petroleum-based fibers an advantage over natural ones, though this is something that Carriere-Pradal refutes.

“The PEF was created in 2013, so it’s almost at its 10-year anniversary,” White told Sourcing Journal. “Since then, we’ve seen a lot of science being published around microplastic pollution, around textile pollution, exactly what the effects are of the chemicals that are released into our land and water. So those issues need to be taken into account.”

The group has been campaigning for additional indicators, including one for plastic waste and another for microplastics. Though the second iteration of the PEF includes a circularity formula ​​that accounts for biodegradability, Make the Label Count wants to see this as a standalone category, perhaps one that considers the repairability and recyclability of a garment. If the PEF will be the methodology for the green claims directive, White said, then the PEF “needs to be fixed.”

“We don’t think the PEF is that wrong,” she said, agreeing that harmonization is vital. “We think after 10 years of hard work and a lot of investment in it, it’s probably the most substantial method out there at the moment. And we just need to fix it. And it’s not a huge fix. It’s just bringing it in line with the latest science.”

What the European Commission is essentially doing through measures like the green claims directive is writing a rulebook for consumers to “make that green transition,” White said. Europe plans on becoming the first climate-neutral continent by 2050—though the term “carbon neutral,” like “climate neutral” and “100 percent CO2 compensated,” according to the draft, will need to be backed up by solid evidence, as will any claim about future environmental performance. All this, she said, is a positive thing.

“Although it’s really difficult and gets really complicated at times, we shouldn’t forget that,” White said. “It’s going to be better, right? We’re trying to work together to deal with our textile pollution problem. We got ourselves into this mess and we’re going to get ourselves out of this mess.”

What about ‘greenhushing’?

Striking the right balance on sustainability communication won’t be easy, said Christian Smith, head of sustainability stakeholder engagement at Zalando, which dropped its “sustainable” designation soon after a Norwegian jury presented the e-tailer with its inaugural grønnvaskingsprisen, or greenwashing prize, in October. Smith said it was already in the process of changing its tack, although he describes it as a “journey.” The German purveyor knew, from its own research, that customers don’t always understand what sustainability means in the context of fashion, meaning that more “specific and trustworthy” product information is necessary to avoid confusion.

Zalando is in the midst of this “data transition and validation process,” Smith said, though it will take some time. Understanding what kind of information it needs to present and how granular it wanted to get on details was the easy part. “Now the challenge is getting the data, the information from the brands, to then fulfill those criteria,” he said. “And that’s where we see the big gap at the moment.” Instead of the flags from before, products will feature a “tappable icon” that directs customers to more information.

Smith said that it’s important to bring customers on this journey. Greenhushing, where companies deliberately hide their efforts in order to avoid attention—and in so doing deflect criticism—isn’t the answer either.

“It’s important, I think, from a brand or retailer’s perspective, that the investments that companies make in these new approaches are recognized, because it’s also through that recognition that people put more money back into the system to their daily improvements,” he said. “What we want to do is find a way to create a much more virtuous cycle so that the customer’s behavior can be improved to justify the decisions that remain in the supply chain. And then we have good information to pull through so we can then fulfill our range of regulatory requirements.”

The idea, he said, is to ensure that “customers, governments, brands, retailers [and] suppliers are all on the same page, working toward the same goal.”

A ‘piece of the puzzle’

George Harding-Rolls, campaign manager at the Changing Markets Foundation, a corporate watchdog group, is intimately familiar with greenwashing. To tout the launch of at London Fashion Week last March, he dressed up as a washing machine and handed out flyers to passers-by. Misleading claims, he said, dupe people into making sustainable choices when they’re not. It’s not just consumers, either.

“Part of the reason that greenwashing is dangerous is it misleads consumers,” he said. “But it also misleads policymakers and misleads those who have the power to pull on the true levers of change, such as regulation and legislation. It misleads them into thinking that the voluntary market-led approach that we’ve had for God knows how long is working.”

There are considerations that he thinks are missing from the draft proposal, including fashion’s growing reliance on plastic bottles for recycled polyester. A deeper look into this form of recycled PET was promised in the EU’s Strategy for Sustainable and Circular Textiles but has so far remained undelivered, he said. He describes diverting plastic bottles from the beverage industry, where they can be recycled multiple times, as little more than “poaching” since the material, once turned into textiles, is challenging to recycle again at scale.

The role of certifications in substantiating green claims is also unclear. The proposal says they can be relevant, but a Changing Markets Foundation study found that most schemes are not fit for purpose. Many schemes—and that includes the EU Ecolabel—lack comprehensiveness by focusing on only a single material, product or “seemingly arbitrary” selection of a product’s life-cycle stages, requiring brands and retailers to use several labels and initiatives to cover the environmental impacts of their entire supply chain.

“I think a lot of our criticisms of certification schemes have been that historic lack of standardization and historic lack [of] regulatory oversight,” Harding-Roll said. “A lot of them have really operated in many ways like private enterprises.”

For its part, Textile Exchange, a sustainability multi-stakeholder group that manages a number of standards relating to organic and recycled content, as well as animal welfare, told Sourcing Journal that it’s still reviewing the leaked text and that it’s “seeking clarity on some key points related to the scope of applicability of the directive as well as its alignment with other developing legislation.”

While the green claims directive is a “piece of a puzzle” that’s sorely needed—and it’s going to create “a lot of work” for marketing teams in particular—Harding-Rolls doesn’t want to call a win exactly. It’s a starting point, not the final destination.

“It’s a really important part of the crackdown, and it’s a really important sign of progress,” he said. “But it’s almost like, ‘O.K., now we’ve done this, the real work can begin. Now we’ve talked about green claims and how to substantiate them, we need to do the true work, which is making sure that we are putting the right products on the market and creating sustainable supply chains.”