Senior Editorial Consultant
The Denim Carbon Crisis: Why Jeans Are in Regulators’ Radar?
By Saumya Verma
Senior Editorial Consultant
Fashion Law IP Blog
Each pair of denim jeans mass-produced emanates 33.4 kg of CO2 into the environment, exploits 3781 litres of water, and occupies 12 square meters of land for their production. Consumer behaviour is a critical factor of Denim’s environmental impact. As consumers are becoming more cognizant about the ecological consequences of fashion, regulators globally are focusing on one of the most prevalent items in contemporary fashion i.e. denim jeans.
The Environmental Toll
The denim industry’s environmental liability goes beyond just carbon emissions, making it responsible for a lot of different things under a lot of different laws. Cotton farming uses 16% of all insecticides in the world. This means that farmers have to follow rules about agricultural chemicals, worker safety, and protecting the environment in all areas where they work. The manufacturing process increases legal peril because of its requirement of energy-intensive operations that in turn necessitate permits for industrial emissions, air quality standards, and greenhouse gas reporting. Water usage patterns, such as requiring about 1,800 gallons to grow cotton and process it further, bring up water rights laws, discharge permits, and stricter effluent standards under national and international water protection frameworks.
Use of chemicals in making traditional denim puts the manufacturing company at the higher risk of getting sued. Formaldehyde, heavy metals like Chromium and Mercury, and synthetic indigo dyes are all hazardous substances that are subject to strict safety guidelines, worker protection protocols, and environmental impact assessments. The sandblasting method is now illegal in many places because it can cause silicosis. These effects on the environment create a chain of legal responsibilities under law of torts, environmental laws, and climate laws.
Legislative Momentum
The European Union has put in place the most complete set of laws to protect the environment from textile pollution. Other areas are quickly following suit. The ‘Waste Framework Directive 2008/98/EC’, which was changed in 2018, says that textile waste must be collected separately starting on January 1, 2025. This makes it a legal requirement for member states and sets up enforcement mechanisms with big fines for not following the rules. The ‘REACH Regulation (EC) No 1907/2006’ is the most important law that controls chemicals that affect the making of denim. Article 33 says that manufacturers must disclose Substances of Very High Concern (SVHC) with a weight concentration of more than 0.1%. If they don’t, they are strictly liable. If you don’t follow the rules, you could face fines of up to €1 million for each violation, and serious violations could lead to jail time.
The ‘Anti-Waste Law for a Circular Economy (AGEC) of 2020’ in France was the first law to create Extended Producer Responsibility (EPR) schemes. These schemes make manufacturers liable for the effects of the products used during manufacturing. These laws make take-back programs, recycling goals, and eco-design requirements legally binding. If a company doesn’t comply with them, they could face fines and even be kicked out of the market. California’s Proposition 65, also known as ‘the Safe Drinking Water and Toxic Enforcement Act’, makes it unlawful for chemicals to be exposed without any clear and reasonable cautions. The law permits people to file lawsuit against violations, with fines of up to $2,500 per day, which means that denim imports that don’t follow the rules could lose a lot of money. ‘The Corporate Sustainability Reporting Directive (CSRD) 2022/2464’, which was enforced in 2024, requires big corporations to make full disclosures about sustainability, including in-depth assessments of product’s environmental impact. False or misleading disclosures have been considered as violations of securities laws, which can lead to executives being held personally liable and even facing penal charges.
Standards and Compliance
International standards have acquired quasi-legal status through their incorporation into regulatory frameworks and commercial contracts. EU rules have used ‘OEKO-TEX STANDARD 100’ testing protocols as a reference, so for many market segments, following them is a legal requirement instead of just a choice. These protocols though are not legally binding but influential. ‘The Global Organic Textile Standard (GOTS)’ sets up rules that can be enforced through certification agreements that make suppliers and buyers legally responsible for following them. If you don’t follow GOTS rules, you are breaking the contract. This means you could be liable for damages and could be kicked out of the market. From Cradle-to-Cradle Certified programs make full lifecycle assessments that meet the due diligence requirements of new supply chain liability laws. Under ‘safe harbour’ provisions in different environmental laws, companies that use certified products get legal protections. Adding these standards to public procurement requirements makes the law even more complicated. More and more government contracts require certified sustainable textiles. This means that following the rules is now a legal requirement for getting into public markets that are worth billions of dollars a year.
Innovation under Pressure
Regulatory compliance has changed technological innovation from something that gives a company an edge to something that is required by law. The EU’s Eco-design for Sustainable Products Regulation sets mandatory performance standards for textiles, such as standards for durability, reparability, and recyclability. These standards can be enforced through market surveillance and fines. Intellectual property law is doing more and more to protect sustainable technologies. This makes it harder for companies that don’t come up with new ideas to compete. Patent protection for methods of reducing water use, alternative dyeing processes, and fibre recycling technologies creates legal monopolies that can keep competitors who don’t follow the rules from getting important sustainability solutions.
The switch from sandblasting to laser technology shows how regulatory pressure has turned optional improvements into legal requirements. In many places, workmen’s compensation laws have rendered employing traditional sandblasting processes illegal. As a result, technological alternatives need to be approved under law. Under chemical laws, new biotechnology products have to go through complicated approval processes. Bio-based indigo dyes need a lot of safety testing and regulatory approval before they can be sold. This makes it difficult for new manufacturing companies to enter into the market, which favours the existing successful companies.
Market Disruption
Regulatory compliance costs create substantial financial obligations that are legally enforceable through various mechanisms. Environmental taxes, carbon pricing, and pollution charges make people directly responsible for the harm they do to the environment, and there are fines for not paying or following the rules. Extended Producer Responsibility fees create ongoing financial obligations that are legally binding and can be collected through normal debt collection methods. If a company doesn’t pay the fees it owes, it could lose its assets, its business licence, and even be charged with a crime.
Securities law says that public companies have to tell investors about any big environmental risks and the costs of following the rules. This means that regulatory impact is a legal requirement in financial reporting. Not fully disclosing environmental liabilities is a form of securities fraud that can lead to civil and criminal penalties for executives. When following the rules makes it harder for new businesses to enter the market, it can lead to competition law issues. This is because companies with enough resources to follow the rules may have more power in the market. Antitrust authorities must weigh environmental goals against competitive issues, which makes it hard to review mergers and look at how the market behaves.
Implementation Barriers
The most difficult legal problems for global denim companies are those that come from having to deal with different laws in different places. Different rules in different places can make it difficult to meet all obligations at the same time. Companies have to deal with complicated questions about which laws to follow and possible regulatory arbitrage opportunities that could break the rules of fair competition. When enforcement is uneven, companies that follow strict rules are at risk of breaking the law because they have to compete with companies that follow weaker rules. This unfair regulation could break international trade agreements and give people a reason to sue under WTO rules. Laws about supply chain liability are making companies more responsible for making sure their suppliers follow the rules. This means that companies have to keep an eye on and enforce environmental standards across their global production networks. Under modern slavery laws, due diligence requirements also include following environmental rules. This means that businesses can be held liable for almost anything. Class action lawsuits are a new kind of legal peril that may occur when denim manufacturing harms the environment and leads to tort claims. Presently, the textile companies can also be held liable under climate law and could be held responsible for contributing to global warming through their emissions. For instance, the ‘UN Fashion Industry Charter for Climate Action’ is a key industry-led initiative setting net-zero emissions targets by 2050. EPR schemes of France is another example of climate law to deal with the adverse effects of fast fashion.
Strategic Imperatives
To stay on the right side of the law, we need to formulate a risk management plan that could include monitoring regulations, protecting rights under contracts, and getting insured. Other areas of focus are setting up legal frameworks for supply chain compliance that covers audit rights, termination clauses, and indemnification agreements pertaining to a company. Making the corporate governance structures consistent with the environmental laws such as board oversight of climate risks, executive pay linked to sustainability metrics, and shareholder involvement in environmental issues is equally important. Legal duties of care may require directors to think about how their business decisions might affect the environment.
Insurance for environmental liability is now a must-have, with special policies that cover fines, cleanup costs, and the risks of climate litigation. Companies need to keep an eye on treaty talks, agreements on regulatory cooperation, and the creation of international standards so they could propose for future legal obligations and impact on competition.
Judicial Precedents and Enforcement
The Urgenda case in the Netherlands and other climate cases around the world show that courts are willing to hold both governments and businesses accountable for their environmental duties. In the class action suit of Milieudefensie et al. v. Royal Dutch Shell plc., a Dutch court found oil giant Shell responsible for CO2 reduction ordering Shell to cut greenhouse emissions by net 45% at end 2030, relative to 2019. Patterns in these precedents reveal that courts are aligned towards using more criminal penalties for violating environmental and climate laws.
Citizen lawsuits and environmental groups may use civil enforcement to put more legal pressure on businesses outside of formal regulatory processes. In some places, private enforcement mechanisms let people who aren’t part of the government start legal proceedings for environmental violations. International arbitration is often used to settle environmental disputes in investment contexts. Tribunals have to find a balance among protecting investors and giving regulators the power to deal with environmental issues. Such precedents set significant standards for regulatory authority and compensation requirements. The changes in the denim industry are part of bigger changes in environmental law that include mandatory standards, criminal enforcement, and full liability frameworks. To be effective, we need more than just following the law. We also need to tactically integrate our legal obligations into our main business operations, risk management systems, and corporate governance structures.
Greenwashing and Law: A Critical Assessment of the Fashion Industry’s Environmental Claims
By Saumya Verma
Senior Editorial Consultant
Fashion Law IP Blog
Greenwashing: Why Words and Actions don’t Always Align?
Fashion industry significantly contributes to worldwide environmental problems, because unsold clothing is discarded every second into landfills. The industry’s production includes around 92 million tonnes of finished products and 79 billion liters of water used annually. The fast fashion boom is particularly harmful, with planned fashion garbage by 2030 it will reach 148 million tonnes. The European Commission has determined that 53% of green claims are vague, deceptive, or unsupported, while 40% of the comments seem to lack actual facts, raising doubts about the validity of these categories. The survey shows that an alarming 68% of the corporate executives in the United States admit their involvement in greenwashing methods, causing significant problems on the credibility of environmental, social and administrative (ESG) claims of companies.
Greenwashing refers to the deceptive promotion of an organization’s environmental initiatives, sometimes including more expenditure on marketing such efforts than on implementing genuine ecologically sustainable policies. Several certifications, classifications and voluntary efforts in the fashion industry, such as the Higg Index and GOTS Certification, denotes sustainable procedures in the fashion and textile sector. However, companies use ambiguous vocabulary, buzzwords, and strategies to disseminate misleading marketing messages, fostering misunderstandings about environmentally linked language and creating a disparity between consumer expectations and the facts provided by firms. In the fashion industry, greenwashing narratives encompass assertions of enhanced sustainability while only marginally improving certain collections, downcycling materials rather than prioritising fiber-to-fiber recycling, or endorsing take-back programs that promote guilt-free consumption. Consumers are ready to accept the risk of greenwashing when they have confidence in the product.
Major Approaches under Law against Greenwashing
a. United States of America
Section 5 of the Federal Trade Commission (FTC) Act stipulates that “unfair or deceptive acts or practices in or affecting commerce” are deemed unlawful. Deceptive practices encompass material representations, omissions, or actions that are likely to mislead a reasonably acting consumer in the given circumstances. Unfair practices result into substantial harm to consumers which cannot be reasonably alleviated and may not be balanced by any amount of compensation. In the year 2022, the Federal Trade Commission started a claim against ‘Kohl’s’ and ‘Walmart’ for their misleading environmental claims. These companies asserted that ‘Bamboo Textiles’ were manufactured through eco-friendly methods. However, it was found that those textiles included rayon which was derived from bamboo through a process involving toxic chemicals, a hazardous pollutant. FTC issued a letter to Kohl’s pointing out that specific actions or practices related to the advertising of textile fibre products violated the ‘Textile Act’ and hence was deemed unfair or deceptive under Section 5(a)(1) of the FTC Act, 15 U.S.C. section 45(a)(1). The D.C. District Court mandated that both companies should discontinue the deceptive claims and refrain from overriding the Textile Laws and must adhere to the FTC’s requirement to submit mandatory reports for the next ten years. Thus, the Walmart and Kohl’s were mandated to pay substantial penalties for disseminating misleading claims and were determined to have violated the Textile Act and associated regulations.
b. European Union and United Kingdom
The EU jurisdiction has also initiated legal action against some major fashion retailers like Giorgio Armani, Christian Dior etc. concerning their false eco-claims.
Italy
The Italian Competition Authority examined ‘Giorgio Armani’ and ‘Christian Dior’ for their potential violations of the Italian Consumer law in their marketing of apparels and accessories. The ICA is also investigating Shein’s Italian website for purportedly misleading eco-claims. The Italian Advertising Self-Regulation Institute (IAP) guarantees that commercial communications must observe principles of honesty, truthfulness, and fairness, in order to protect consumer interests.
Germany
Germany has primarily depended on private enforcement to address greenwashing, while NGOs and consumer protection organisations have actively engaged in combating this issue for years. Actions have been taken against multiple companies, particularly in the fashion sector, including Adidas and Shein. Numerous cases have been resolved outside of court as a result of the compliance of the involved fashion companies.
Netherlands
The Netherlands has encountered considerable examination within the fashion sector, as the Authority for Consumers and Markets (ACM) revised its guidelines regarding sustainability claims in 2023. After investigating ten clothing companies, the ACM determined that Decathlon and H&M breached its guidelines by issuing vague and/or misleading sustainability claims. A successful greenwashing complaint was filed with the Dutch Advertising Code Committee against Primark.
France
France has emerged as a leader in both fashion and greenwashing regulations. ‘The Climate and Resilience Law’ was enacted in 2021 to enhance existing French legislation and strengthen environmental protections. The law addresses themes that impact citizens’ daily lives, such as consumption patterns and consumer behaviour. French law mandates that advertisements must be visible or accessible at the point of purchase, reliable, and easily comprehensible to safeguard consumers. The 2021 Resilience Law enhances the French Consumer Code (FCC), addressing misleading commercial practices and establishing potential penalties for environmental claims. It revised Article L. 121 of the FCC to incorporate the environmental impact of a product and to establish criteria for claims regarding the extent of the advertiser’s commitments. The law expands penalties for deceptive consumer practices under the FCC, allowing for fines to rise to eighty percent of the costs associated with misleading marketing practices related to environmental claims. In February 2020, France enacted ‘the Anti-Waste and Circular Economy Law’, aimed at eradicating waste and pollution throughout the entire life cycle of products. As of January 2023, ‘French Decree 2022-748 AGEC’ mandates verified environmental labelling for large clothing brands operating in France, with implementation for smaller companies scheduled to occur gradually in 2024 and 2025.
United Kingdom
The United Kingdom possesses a fragmented and non-mandatory framework for regulating consumer-oriented green claims, resulting in greenwashing activities occurring beyond the jurisdiction of England’s courts. Recently, the UK’s Competition and Markets Authority (CMA) and the Advertising Standards Authority (ASA) have focused on addressing both intentional and unintentional greenwashing in business-to-consumer communications. In September 2021, the CMA released the Green Claims Code, comprising six guiding principles designed to assist businesses in comprehending and adhering to their responsibilities under consumer protection law regarding green claims. The principles encompass the necessity for claims to be substantiated, truthful, accurate, clear, and unambiguous.
In September 2024, the CMA released guidance titled ‘Complying with consumer law when making environmental claims in the fashion retail sector’, which applies to all businesses making environmental claims regarding clothing, footwear, fashion accessories, or related services. The Guidance delineates 11 rules for companies, emphasising the necessity for green claims to be clear and accurate, to avoid omitting critical information, to refrain from using ambiguous terminology, to prevent misleading imagery and icons, to provide clear and equitable comparisons, and to articulate any actions required by consumers for the claim to be realised.
c. India
India has yet to implement a specific law targeting greenwashing; however, existing consumer protection laws and regulations may provide some assistance. The Consumer Protection Act, 2019 empowers the Central Authority to establish guidelines aimed at preventing unfair trade practices and safeguarding consumer interests. In January 2024, the Central Authority released ‘the draft Guidelines for Prevention and Regulation of Greenwashing’, marking the inaugural instance of specific legislation addressing greenwashing in India. The Draft Guidelines characterise greenwashing as deceptive or misleading practices that involve concealing, omitting, or obscuring pertinent information through exaggeration, vague, false, or unsubstantiated environmental claims, as well as the use of misleading language, symbols, or visuals. A new definition of Environmental Claims (ECs) is introduced, characterising them as statements regarding a product or service that imply environmental friendliness. The claims seek to demonstrate that the product or service is environmentally responsible or eco-friendly.
The Draft Guidelines asserted that all ECs must be substantiated, clear, and unambiguous. The use of generic environmental terms such as ‘clean’, ‘green’, ‘eco-friendly’, ‘eco-consciousness’, ‘good for the planet’, ‘minimal impact’, ‘cruelty-free’, and ‘carbon-neutral’ is prohibited without sufficient explanation, substantiation, or disclosures. Technical environmental terms such as Environmental Impact Assessment, Greenhouse Gas Emissions, and Ecological Footprint should be accompanied by accessible language, with clear explanations of their meanings and implications. All ECs must ensure comprehensive disclosures, utilising research data that does not selectively highlight positive findings while concealing negative results. Individuals submitting ECs must specify whether the claims relate to the product, its manufacturing process, packaging, usage, disposal, or the service and its delivery process. Comparative ECs should utilise verifiable and relevant data provided to consumers, clearly delineating the specific aspects under comparison. Claims regarding specific environmental characteristics, including Carbon Offsets, Carbon Neutral, Compostable, Degradable, Free-of, Sustainability, Non-Toxic, 100% Natural, Ozone-Safe, Ozone-Friendly, Recyclable, Refillable, Renewable, and similar assertions, require substantiation through credible certification, reliable scientific evidence, or independent third-party verification.
The Advertising Standards Council of India (ASCI) released the Guidelines for Advertisements Making Environmental/Green Claims in January 2024, marking a significant change in India’s regulatory framework regarding greenwashing. The ASCI Guidelines clearly outline different types of claims and establish specific standards for each category. Advertisers must support absolute claims with robust empirical evidence, while comparative claims require proof of environmental superiority over earlier versions or competing products. Additionally, environmental claims must address the entire product life cycle. Misleading representations and manipulative visual elements are explicitly prohibited.
Landmark Case Laws
1. Lee v. Canada Goose US, Inc
The consumer class action lawsuit against Canada Goose was voluntarily dismissed in 2022; however, the court permitted several of the plaintiff’s claims to proceed past a motion to dismiss, indicating its readiness to acknowledge and uphold greenwashing allegations. The court determined that suppliers of Canada Goose employed inhumane trapping techniques, resulting in strangulation and fractures in animals captured for Canada Goose garments. The court determined that the allegations sufficiently supported the inference that Canada Goose’s claims about ‘ethical’ fur sourcing were misleading to consumers, as the company sourced fur from trappers employing allegedly inhumane leghold traps and snares. On April 27, 2022, the case was voluntarily dismissed; however, the court ruled in favour of the plaintiff on several grounds, indicating its readiness to acknowledge a greenwashing claim, despite Canada Goose’s assertions that its animal welfare claims were nonactionable and subjective.
2. Commodore v. H&M and Lizama v. H&M
In 2022, two class action lawsuits were initiated against H&M, alleging that the company implemented a marketing strategy designed to mislead consumers regarding the environmental and sustainable attributes of its products. The Commodore complaint asserted that H&M had published environmental scorecards on its website, referred to as ‘Higgs Sustainability Profiles’, which included ‘falsified information that does not align with underlying data’. The complaint asserted that H&M’s ‘Conscious’ products utilised unsustainable materials and contained a greater proportion of synthetics compared to the primary collection. The complaints asserted that the plaintiffs depended on H&M’s deceptive representations and would not have acquired the products had they been aware of the misleading nature of those representations. As of January 11, 2023, litigation for both cases remain ongoing.
These class actions indicate an increased consumer propensity within the fashion industry to acquire environmentally friendly and sustainably produced goods, as well as to pursue legal remedies when perceiving brand deception. There is a deficiency in explicit guidance and standards regarding sustainability claims, which complicates the process of addressing misleading claims and holding defendants accountable. Furthermore, imposing the burden on plaintiffs to manage the complexities of a class action lawsuit renders consumer class actions an inequitable and unreliable mechanism for enforcing against greenwashing.
Conclusion
The fashion industry has seen a rise in greenwashing, driven by heightened sustainability awareness, intricate supply chains, and insufficient regulatory oversight. This has resulted in a notable rise in consumer class actions, reflecting an increased propensity among consumers to buy environmentally friendly products and pursue legal remedies when they perceive brand deception. These cases have proven unsuccessful, indicating that the law ought to adopt a more proactive stance in examining contemporary marketing claims and offering explicit guidance on sustainability assertions in the forthcoming revision of the Green Guides. Consumers may need to independently address greenwashing and pursue remedies for their grievances.
Other References:
- Ekstrand, Susie Stœrk, and Kristine Lilholt Nilsson. “Greenwashing?” European Food and Feed Law Review 6, no. 3 (2011): 167–73. http://www.jstor.org/stable/24325853.
- Breen, Kieran. “Cleaning Up Fast Fashion.” RSA Journal 166, no. 2 (5582) (2020): 34–37. https://www.jstor.org/stable/27008580.
- Rome, Adam. “Fashion Forward? Reflections on the Environmental History of Style.” Environmental History 23, no. 3 (2018): 545–66. https://www.jstor.org/stable/48554107.
- Schiller-Merkens, Simone. “Will Green Remain the New Black? Dynamics in the Self-Categorization of Ethical Fashion Designers.” Historical Social Research / Historische Sozialforschung 42, no. 1 (159) (2017): 211–37. http://www.jstor.org/stable/44176030.
- Lee v. Canada Goose US, Inc., 20 Civ. 9809 (VM) (S.D.N.Y. Jun. 29, 2021)
- Derisi, Stephanie. Modern Language Studies 46, no. 1 (2016): 87–89. http://www.jstor.org/stable/44864111.
- Kaner, G. (2021). “Greenwashing: How Difficult It Is to Be Transparent to the Consumer—H&M” Case Study. In: Mukonza, C., Hinson, R.E., Adeola, O., Adisa, I., Mogaji, E., Kirgiz, A.C. (eds) Green Marketing in Emerging Markets. Palgrave Studies of Marketing in Emerging Economies. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-74065-8_9
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