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Higg MSI Controversy Fingered in Sustainability Labeling Trends

Flagging growth in sustainable labeling indicates apparel brands may be shifting their environmental efforts and growing more sensitive to greenwashing accusations, recent Centric Pricing data suggests.

Each of the three countries in the market intelligence platform’s survey—the U.K., U.S. and Germany—saw product counts of generically labeled sustainable goods increase from January 2022 to January of this year. This growth, however, came in slower than in previous years, Centric Pricing, formerly known as StyleSage, reported, with counts peaking in October and since declining. The U.S. saw the largest year-over-year increase, 15 percent, while Germany experienced the smallest, 6 percent.

Product counts of certified sustainable products plummeted, meanwhile. In the U.S., these numbers peaked in April, but ultimately fell 34 percent year over year in 2022. In the U.K. and Germany, counts fell consistently throughout the year, falling 48 percent and 54 percent, respectively, by January 1.

Centric Pricing attributed the drops “in part” to last year’s Higg Materials Sustainability Index controversy. Though counts of certified sustainable products were already on the decline in the first half of the year, this downward trend accelerated in the second half, after the Sustainable Apparel Coalition removed the published Higg Index seal and scorecard from participating online retail platforms. The move came weeks after the Norwegian Consumer Authority warned H&M Group and outerwear brand Norrøna that using Higg MSI data in sustainability claims would be considered “misleading” and a breach of greenwashing laws.

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The next month, H&M found itself at the center of a class-action lawsuit in the U.S. over what the plaintiffs called “false and misleading” environmental scorecards and advertising. Across the pond, Britain’s Competition and Markets Authority revealed that it was investigating Asos, Boohoo and George at Asda over concerns their sustainability claims misled consumers. Months later, H&M stripped its “Conscious Choice” indicator from its online store worldwide. Zalando followed suit soon after.

On the consumer side, demand for sustainable goods grew in 2022, with sold-out rates rising 23 percent for certified sustainable products, Centric Pricing found. These rates grew just 12 percent for generically labeled sustainable products and 9 percent for everything else.

“Even as regulatory pressures increase, it raises questions as to whether brands may be deprioritizing some of the tougher sustainability challenges as other financial pressures are faced,” Centric Pricing wrote in the report’s conclusion.

The analytics platform also observed a shift in the type of categories in which recycled materials were most used. Across the U.S., U.K. and Germany, shirts and outerwear led the way, outstripping sweaters and sweatshirts, the report’s previous leader.

As inflation drove up prices around the globe last year, certified sustainable products grew substantially more expensive for the consumer. In Germany, the average original price of certified sustainable products jumped 31 percent year over year, significantly faster than the 19 percent increase generic sustainable products experienced and above the 17 percent bump of all other products. In the U.S. and U.K., inflation proved much more dramatic, with prices of certified sustainable products up 75 percent and 116 percent year over year, respectively.