Sustainable Fashion’s Next Frontier: Marketing Regulations & Labeling Requirements
By Rebecca Ballard
The vast majority of American consumers are interested in purchasing clothing made in ways that care for people and the planet. In fact, consumer’s interest in sustainable products and their willingness to pay more is increasing rapidly each year. For example, according to a 2022 study by First Insight and the Baker Retailing Center at The Wharton School of the University of Pennsylvania, nearly 90% of GenX consumers were willing to spend 10% more for sustainable products, compared to just 34% in 2020.
However, there is a major impediment standing between U.S.-based consumers who want to make thoughtful purchases and the ability to do so: marketing regulation and, relatedly, product labeling requirements. There is also great momentum right now, including the opportunity for the U.S. Federal Trade Commission (FTC) to take action this year.
Fashion brands are misleading consumers – and worse
Brands that cause consumers to view their products as sustainable have a significant market advantage. Unfortunately this also presents an opportunity for brands to mislead customers, which many are seizing. Multiple studies (check out this one and this one) have shown that many, and perhaps even the majority, of environmental sustainability claims by fashion brands include some form of “greenwashing,” resulting in claims which are misleading or even just plain false.
[In 2022] 90% of GenX consumers were willing to spend 10% more for sustainable products, compared to just 34% in 2020.
I see misleading and false advertising happen so often that I consider it one of the greatest impediments to improving the impact of the fashion industry. When Kourtney Kardashian unveiled her “sustainable” collection with Boohoo last year I didn’t know whether to laugh or cry. Boohoo’s practices are incredibly abusive towards workers and our planet, however with their tremendous marketing budget Boohoo has a seemingly infinite amount of incredible resources to push forward a false sustainability narrative.
88% of American consumers don’t immediately trust brands that say they are sustainable.
As noted in Remake’s most recent Fashion Accountability Report, we are seeing tremendous business model, commercial practices, and transparency innovation happening with smaller companies. In a noisy marketplace where most fashion brands are now touting sustainable claims, smaller brands who are living out sustainable practices innovatively in ways that can be scaled are constantly being boxed out by expensive marketing campaigns and/or undercut by lower pricing by larger companies. I am disheartened by the number of small, innovative sustainable fashion brands I see close every year, often citing not being able to afford marketing of their hard work around their environmental and social impact. Thanks to greenwashing their competitive advantage is lost.
Consumers are (understandably!) confused and frustrated
I’m not the only one who is disheartened and frustrated by the present landscape. Friends have shared with me that they would like to purchase sustainable products, however, since they don’t know what claims are true they don’t know how to properly purchase and disregard any sustainability claims made by brands altogether. A 2021 survey by Geno showed that 88% of American consumers don’t immediately trust brands that say they are sustainable. This is an incredibly dangerous phenomenon that robs brands working hard on their sustainable impact of their deserved and needed market rewards. It also limits the innovation necessary to advance the nascent area of sustainable fashion through consumer support.
Boohoo’s practices are incredibly abusive towards workers and our planet, however with their tremendous marketing budget Boohoo has a seemingly infinite amount of incredible resources to push forward a false sustainability narrative
Consumers are looking to be able to differentiate products, as evidenced in a 2023 McKinsey article noting that while sustainability claims are linked with product growth the less common claims (e.g., “carbon zero”) experienced more gains than the most prevalent ones (e.g., “environmentally sustainable”). You simply can’t expect anyone to read through various methodologies and the “fine print” necessary to evaluate one product’s claim vs. another, or for brands to not use every tool in their arsenal to put their own practices in the best light possible using multi-million dollar advertising budgets.
55% [of American consumers] wanted brands to help them understand how their products are more sustainable than alternatives and 50% stated they would like sustainability labeling.
There is understandable and potentially even expected consumer confusion around the different methodologies brands tout to measure and share their impact. For one example of this we can turn to the 2021 Allbirds case, which shows that there can be different perspectives around how the environmental impact of a product should be determined. The case concerned marketing claims made by Allbirds around the sustainability of its wool shoes. Allbirds used a life cycle assessment (LCA) tool and marketed what they determined to be their average product’s carbon footprint, with a focus on materials, manufacturing, use, and end of life. However the Plaintiff, who had previously purchased Allbirds shoes, took issue with this approach. The Plaintiff noted that Allbirds used the Higg Material Sustainability Index (Higg MSI), and they criticized this tool as addressing only raw materials and lacking standards for comparing different materials. The Plaintiff also stated that Allbirds looked just to carbon footprint and not other environmental issues related to wool production, including water, eutrophication, and land occupation, and they cited the work of People for the Ethical Treatment of Animals here (PETA). The Plaintiff believed that if Allbirds had looked to all elements of sheep farming, like methane production and chemical runoff, the carbon footprint would be much higher. The Allbirds case was dismissed, as the judge noted there was a disagreement around the best methodology rather than a false, deceptive, or misleading statement. However, this case shows a disconnect between the methodology used by a brand versus the methodology sought by a consumer and that used by an animal welfare organization (PETA). With all of these different methodologies for measuring environmental impact, how can consumers be expected to compare products and make choices in line with their values?
It’s time for the U.S. government to get involved here
As we’ve seen time and time again, letting the fashion industry regulate itself with voluntary agreements doesn’t do anything to move the needle and improve the fashion industry. There are simply too many forces propelling a race to the bottom. We need a universal framework and standardized tools that allow for clarity and easy consumer comparisons between sustainability claims, rather than expecting consumers to have the knowledge necessary to do so. In a 2021 survey of American consumers conducted by Geno, 55% wanted brands to help them understand how their products are more sustainable than alternatives and 50% stated they would like sustainability labeling. I love the work the brand Nisolo has done here with their sustainability labeling, however without other brands sharing this same information it’s hard to make an informed choice between the abundance of options. Even large brands agree – the 2023 McKinsey State of Fashion Report shows that 79% of global fashion executives consider a lack of standards or rubrics to assess sustainability performance to be their greatest hurdle in how consumers perceive their sustainability efforts. However, we can’t leave it up to the large brands to create this framework.
In other countries we are seeing the government step in. For example, in 2022 the Norwegian Consumer Authority cracked down on greenwashing by stating that one of the most commonly used “sustainability tools” could not be used in supporting sustainability claims. Other countries around the world are stepping up their greenwashing laws and enforcement, including Canada, the UK, and Australia. In line with the 2022 EU Strategy for Sustainable and Circular Textiles, the European Union may be approving Digital Product Passports (DPPs) in 2024 with implementation starting in 2026. The EU Strategy discusses both social and environmental issues around clothing, and it is very comprehensive. Environmental issues discussed include stopping the destruction of unsold and returned textiles, microplastics pollution, extended producer responsibility (EPR), the export of textile waste, reducing overproduction and overconsumption, supporting social enterprises, and environmental marketing claims. The EU Strategy also addresses social issues like child labor, discrimination, gender equity, forced labor, occupational health and safety concerns, and unfair wages. Details are still in the works, however the new EU DPPs could take the form of a QR code or hardware tag (e.g., RFID, Bluetooth) that work with existing technology, like smart phones.
In fact, France has already moved forward eco-labeling regulations. As of January 2023, large brands are already required to for all clothing sold in France, and this will be phased in for smaller brands over 2024 and 2025. In France, brands must share detailed information on environmental aspects like repairability, recyclability, sustainability, re-use, recycled material content, use of renewable resources, traceability, and plastic microfiber content.
What’s happening in the U.S. with marketing claims around sustainability
America has led the way with labor regulations over 100 years ago in the aftermath of the Triangle Shirtwaist Factory Fire. However, U.S. fiber content and care laws have not substantially changed since 1972’s Federal Trade Commission (FTC) Care Labeling Rule, which was amended in 1997. We need clothing labels that include information around labor and environmental aspects as well as end of life instructions. This must be presented in a way that is easy for consumers to understand and use to make informed choices.
“The onus of sorting through green claims should not fall on consumers. Corporations have a responsibility to be clear and non-deceptive about their products, and we need government to set clear rules that corporations must follow and consumers can use.” – Dr. Quinta Warren
The U.S. Federal Trade Commission (FTC), whose mission includes protecting consumers from misleading and untrue advertising, will hopefully be taking action related to the marketing of environmental claims soon. For some background, the FTC first issued their Green Guides in 1992 to include information around “1) general principles that apply to all environmental marketing claims; 2) how consumers are likely to interpret particular claims and how marketers can substantiate these claims; and 3) how marketers can qualify their claims to avoid deceiving consumers.” The Green Guides addresses best practices for marketing environmental claims, including details around not making overly broad or misleading claims and having scientific evidence behind claims. However, the guides were last updated in 2012, and at that time the Green Guides didn’t even address the terms “sustainable” and “organic”. And at present there is also no enforceability against brands who flout these marketing practices, resulting in the current U.S. landscape which is ripe with greenwashing.
In December 2022 the FTC opened up the opportunity for anyone (individuals, nonprofits, businesses, you name it!) to provide written comments on the guides by April 24th, 2023. As stated by the FTC, this could include whether to keep the guides at all, what modifications should be made, and even whether the FTC should establish enforceable requirements (which it has the power to do!) around unfair and deceptive environmental claims. The Fashion Connection submitted a comment, which Remake and other leading groups and individuals in the sustainable fashion movement supported. This comment outlined the many reasons why we need enforcement around the environmental claims made by fashion companies. It also stated that the FTC should align their Green Guides with the environmental marketing regulations of other nations, creating more united pressure for change.
We are still waiting for the FTC to take action. On May 23, 2023, the FTC held a workshop open to the public entitled “Talking Trash at the FTC: Recyclable Claims and the Green Guides”, and you can view the video recording. Unfortunately, despite textiles being our country’s fastest growing waste stream and all of the challenges around clothing recycling, none of the workshop topics specifically addressed clothing recycling. However, I was heartened to see that both panelists and audience members noted this issue and also discussed enforceability. In the words of panelist Dr. Quinta Warren, Associate Director of Sustainability Policy at Consumer Reports, “The onus of sorting through green claims should not fall on consumers. Corporations have a responsibility to be clear and non-deceptive about their products, and we need government to set clear rules that corporations must follow and consumers can use.” The FTC is accepting written comments related to issues discussed at the workshop around recycling through June 13, 2023, so feel free to send in a comment if you like!
What’s next?
I hope that the FTC will take action and update the Green Guides. We need a new version that is up to date, specific, robust, appropriately tailored to issues in fashion and all other relevant industries, and, most importantly, legally enforceable. We are seeing incredible momentum around the world, and we have a chance for the U.S. to lead the way through highlighting best practices in the Green Guides and bringing in enforceability. I look forward to sharing an update with you when the FTC shares their next steps.
In addition to greater regulation around marketing claims, I would love to see a required label tailored for the U.S. audience that covers both environmental and social elements which would allow consumers to quickly and easily make comparisons between similar products. I believe that the pressure this would place on fashion brands would bring about tremendous positive change across the fashion industry. Ideally this environmental and social labeling requirement would be even broader than fashion brands, covering a range of consumer products with relevant labeling and ushering in an era of more conscious consumption based on honesty, science, and care for our planet as well as the people who make the products we use each day.
This Editorial includes content from a commentary on the Green Guides filed by The Fashion Connection on April 16, 2023, and supported by a number of individuals and organizations, including Remake.
Rebecca Ballard
Rebecca moved to Washington, DC in 2007 to practice social justice law, and she has worked on sustainable fashion for over a decade. She founded The Fashion Connection to make connections advancing the U.S. sustainable fashion movement, and she advises companies, nonprofits, and individuals through Rebecca Ballard Advisory. Rebecca has lived in or visited all of the top 10 garment-producing countries in our world.
