What Makes Clothing Sustainable? The FTC’s Green Guides Attempt to Explain

by Chris Colloton, Associate Member, University of Cincinnati Law Review Vol. 91

I. Introduction

Today, an increasing number of people around the world regard climate change as a significant concern.¹ A study from the Pew Research Center showed that in the United States specifically, a bipartisan majority of Americans share this concern and believe the federal government should do more to protect the environment.² When it comes to contributors of environmental degradation, fossil fuel companies or large-scale agriculture operations likely come to mind as the foremost offenders, but there is another culprit that each one of us likely encounters every day: clothing.³ The modern textile industry accounts for nearly ten percent of worldwide carbon dioxide output – more than international flights and shipping combined.⁴ Moreover, the industry is responsible for devastating amounts of wastewater pollution, deforestation, and microplastic production.⁵ For perspective, Americans throw away around eleven million tons of textile waste each year – amounting to almost two thousand pieces of clothing each second.⁶ These unsustainable practices are exacerbated by the meteoric rise of “fast fashion,” which seizes upon a culture of consumption and emphasizes immediate delivery of the latest trends and styles.⁷ Many clothing companies and specialty retailers have taken notice and have begun to prioritize the environmental impact of their business. In principle, these efforts are straightforward: to reduce their carbon footprint. But importantly, these measures also represent a keen business opportunity that signals to both existing and potential customers that the companies are committed to being environmentally conscious.

With these efforts to “go green” also comes legal risk, and this article aims to clarify what clothing companies must consider as they launch eco-friendly initiatives, specifically focusing on the requirements to market a product as “sustainable.” It begins with a brief overview of the Federal Trade Commission Act and continues with a recap of the Federal Trade Commission’s “Green Guides.” Next, the article examines the guidance provided by these materials and outlines steps retailers must take to protect themselves from adverse legal consequences stemming from claims made on their garment labels. The article concludes by emphasizing the necessity of a more precise definition of sustainability so that clothing companies can be assured their attempts to mitigate environmental damage will not be vulnerable to costly litigation.

II. Background

A. Section 5 of the Federal Trade Commission Act

During the late nineteenth and early twentieth centuries and on the heels of the Industrial Revolution, American businesses experienced virtually unfettered growth.⁸ Led by infamous robber barons such as John D. Rockefeller and Andrew Carnegie, corporations like Standard Oil and Carnegie Steel tightened their grip on their respective industries and enjoyed unprecedented wealth.⁹ In response to the crushing tactics employed by these companies – largely at the expense of small businesses and laborers themselves – Congress passed the Sherman Antitrust and Clayton Antitrust Acts, both of which were designed to restrict monopolistic behaviors and anti-competitive practices.¹⁰ In 1914, Congress went further by enacting the Federal Trade Commission Act (“FTC Act”) to create an agency to enforce these earlier statutes and protect the public from unfair business practices.¹¹

The FTC Act created the Federal Trade Commission (“FTC”), composed of a bipartisan group of individuals charged with enforcing a variety of antitrust and consumer protection laws that involve nearly every area of commerce.¹² In particular, the FTC enforces section 5 of the FTC Act, which prohibits “unfair methods of competition” and “unfair or deceptive acts or practices” in or affecting commerce.¹³ Accordingly, section 5 of the FTC Act governs all environmental claims made in marketing, advertising, or product packaging to ensure any such claim is not unfair or deceptive to consumers.¹⁴

B. The Federal Trade Commission’s “Green Guides”

To help businesses avoid making deceptive or misleading environmental claims under section 5 of the FTC Act, the FTC first issued the Green Guides in 1992.¹⁵ The Green Guides – which are merely interpretations of the law and thus do not have any legal effect of their own – provide guidance to organizations, including: general principles to apply to all environmental claims, how consumers are likely to interpret particular claims, and how businesses can qualify and substantiate their claims to avoid deceiving customers.¹⁶ Most recently revised in 2012, the Green Guides contain specific direction for a wide array of marketing efforts, such as claims about carbon offsets, non-toxicity, recyclability, and renewable energy.¹⁷

Notably, the Green Guides caution companies against making far-reaching, unqualified claims that a product is “environmentally friendly” or “eco-friendly” due to the implicit suggestion that such products have no adverse environmental impact whatsoever.¹⁸ And because many people may perceive the term “sustainable” differently, the Green Guides offer similar advice to businesses interested in labeling their products with that designation.¹⁹ Ultimately, the Green Guides do not explicitly address “sustainable” claims and instead only offer a rough commentary for businesses to consider before marketing anything with the term.²⁰

III. Discussion

The word “sustainable” – as the Green Guides correctly acknowledge – has no singular meaning or interpretation.²¹ For example, one might read a jacket labeled as “sustainable” as being a testament to its durability, likely to last through the years and resist wear-and-tear.²² Another person, by contrast, might seem the same label and understand the jacket was made in an ethical, environmentally conscious manner.²³ Due to the lack of consensus surrounding the term, the FTC understandably declined to incorporate an express definition of “sustainable” in the current iteration of the Green Guides. As a result, businesses are left with a sizeable amount of uncertainty regarding any claims that their products are “sustainable” or “made sustainably.” The fact that the FTC has not plainly interpreted the term, however, does not provide companies with blanket permission to skirt the FTC Act’s section 5 prohibition of deceptive advertising. Indeed, should companies wish to proceed and market their products as “sustainable,” they are still legally obligated to substantiate a customer’s reasonable understanding of the claim based on the context in which the claim is made.²⁴

For the clothing and fashion industry in particular, making a sustainable claim presents unique challenges. Chief among those challenges is the concept of traceability, which refers to the process of tracing the origins, movement, and evolution of the particular piece of clothing.²⁵ Put simply, it means knowing where – and how – every single part of the garment was made.²⁶ For larger clothing brands with thousands of products and an enormous supplier base located across multiple continents, traceability can be extremely complicated.²⁷ Still, the ability to identify where each product comes from and who made it is inextricably tied to the idea of sustainability. Absent some level of traceability, clothing companies could freely market their products as “sustainable” without ever confirming that the products were not made with child labor, toxic components, or in locations different than advertised.²⁸

Another challenge clothing companies face in making sustainable claims is more obvious: what the clothing is actually made of. Good On You, an Australian brand rating agency that arms customers with insight on sustainable fashion, lists several materials such as recycled cotton, organic linen, and TENCEL, a cellulose fabric derived from wood pulp, as those that live up to their sustainable labels.²⁹ These materials have quickly become coveted by many large, household-name retailers.³⁰ Zara recently pledged that half of its sales in 2022 would come from “ecologically grown cotton” and other brands, such as Gucci, Saint Laurent, and Alexander McQueen have all issued sustainability reporting that details their initiatives to use recycled or organic materials.³¹

Because clothiers may want to label their products as “sustainable” for a variety of reasons, such as referring to the material itself or the supply chain processes by which it was made, careful detail should be paid to qualifying any such label with specific data or evidence.³² In other words, if a company wants to market a pair of denim jeans as “sustainable,” that company should, on its label or advertising, clearly explain what aspect of the garment is “sustainable.” If the basis of its sustainability claim relates to the jeans being made from recycled cotton or some other biodegradable material, the brand should accordingly disclose any and all limitations to prevent the claim from being deceptive – for example, if only fifty percent of the jeans are made from recycled cotton.

In July 2022, fast-fashion giant H&M discovered the potential consequences of making frivolous sustainability claims when a New York resident filed a class-action lawsuit in federal court, accusing the retailer of making false claims about the sustainability of its clothing.³³ The basis of the plaintiff’s claim originates from H&M’s “Sustainability Profiles” and “environmental scorecards,” which an independent investigation showed to allegedly contain falsified and even outright deceptive information about the company’s sustainability practices.³⁴ The plaintiff further contends that H&M has created an extensive marketing scheme to “greenwash” its products, representing them as environmentally-friendly when they are anything but.³⁵ In an especially egregious example, the plaintiff claims several items from the brand’s “Conscious Collection” were advertised as using twenty-percent less water to manufacture when they were actually made with twenty-percent more water.³⁶ While the case remains pending, the outcome could result in H&M being liable for an enormous amount of compensatory and punitive damages if the court finds the retailer did in fact engage in these prohibited marketing behaviors.³⁷ Likewise, the H&M lawsuit could be a watershed moment for the clothing industry as a whole, foreshadowing an uptick in consumer litigation about these types of marketing efforts.³⁸ Indeed, companies like Allbirds and Canada Goose have also recently faced legal action concerning similar claims of “sustainable sourcing” practices.³⁹

Nevertheless, it is important to recognize that without a universal definition of sustainability or a more robust set of minimum actions required by clothing companies to market their pieces as sustainable, many brands will find themselves – inadvertently or otherwise – susceptible to litigation under section 5 of the FTC Act and equivalent state law.⁴⁰ While the FTC’s Green Guides serve as a worthy starting point, they ultimately do not provide retailers clear-cut direction as to what they must do to advertise their products as sustainable. As a result, vague buzzwords and loosely-described timelines about “going green” will continue to torment the fashion industry.

IV. Conclusion

Although the FTC has not included definitive guidance for sustainability claims in its Green Guides, it has not entirely foreclosed the possibility of clothing companies marketing their styles in this way.⁴¹ So long as retailers substantiate their sustainability claims with a reasonable basis, which often includes research, studies, or other objective scientific evidence, they will likely be able to avoid a deceptive advertising claim under section 5 of the FTC Act.⁴² And as more people begin to consider climate change and environmental conservation as an existential priority, sustainability in fashion is becoming not just a “nice-to-have” for retail leadership but instead a “must-have” operational imperative.⁴³ Consequently, it has never been more important for these companies to consider their obligation to craft sustainability labels in an authentic, prominent, and clear way to comply with the FTC’s bar against unfair or deceptive advertising.

Cover Photo by Keagan Henman on Unsplash

Chris Colloton

Chris Colloton is a native of Cincinnati and received his B.A. in Spanish Language from The Ohio State University in Columbus, Ohio. Prior to law school, Chris worked in the corporate retail industry as a merchandise planner for five years. He is especially interested in legal issues affecting the LGBTQ+ community, constitutional law, and the intersection of law and business.

References

1
Anthony Leiserowitz et al., International Public Opinion on Climate Change, Yale Program on Climate Change Commc’n 9 (2022), https://climatecommunication.yale.edu/wp-content/uploads/2022/06/international-public-opinion-on-climate-change-2022a.pdf [https://perma.cc/C2MD-DS88] (indicating that a majority of respondents in nearly every surveyed country said they “very” or “somewhat” worried about climate change).
2
Alec Tyson & Brian Kennedy, Two Thirds of Americans Think Government Should Do More On Climate, Pew Rsch. Ctr. (June 23, 2020), https://www.pewresearch.org/science/2020/06/23/two-thirds-of-americans-think-government-should-do-more-on-climate/ [https://perma.cc/L3DD-EQX6] (showing bipartisan support for government policies such as large-scale tree planting, carbon-capture tax credits for businesses, and more stringent regulations on power plant emissions).
3
Rachel Dottle & Jackie Gu, The Global Glut of Clothing Is An Environmental Crisis, Bloomberg (Feb. 23, 2022), https://www.bloomberg.com/graphics/2022-fashion-industry-environmental-impact [https://perma.cc/X47F-8GCZ].
4
Id.
5
Renee Cho, Why Fashion Needs to Be More Sustainable, Columbia Climate Sch. (June 10, 2021), https://news.climate.columbia.edu/2021/06/10/why-fashion-needs-to-be-more-sustainable/ [https://perma.cc/RB2V-2AUZ%5D (stating that fabric dyeing is responsible for roughly 20% of global water pollution and 70 million tons of trees are cut down annually to feed the industry’s need for wood pulp to make different fabrics).
6
See Dottle & Gu, supra note 3.
7
Id.; see also Audrey Stanton, What Is Fast Fashion, Anyway?, The Good Trade (Oct. 4, 2022), https://www.thegoodtrade.com/features/what-is-fast-fashion [https://perma.cc/DW9Z-VHK9]. “Fast fashion” is defined as a method of design, manufacturing, and marketing focused on quickly and inexpensively producing high volumes of clothing to bring runway styles into shoppers’ hands as fast as possible. The article further discusses how many fast fashion brands rely on trend replication and low-quality materials to offer new collections almost weekly, resulting in consumers spending an overwhelming amount on what is really disposable clothing. Id.
8
See, e.g., Daniel Baracskay, Federal Trade Commission, The First Amend. Encyc. (2009), https://www.mtsu.edu/first-amendment/article/812/federal-trade-commission [https://perma.cc/BJ3P-JN47]; Bill Fay, Federal Trade Commission Act, Debt.org (June 17, 2020), https://www.debt.org/credit/your-consumer-rights/federal-trade-commission-act/ [https://perma.cc/4Z8E-GLUE]; Lubin et al., Meet The 24 Robber Barons Who Once Ruled America, Bus. Insider (Mar. 20, 2012, 12:56 PM), https://www.businessinsider.com/americas-robber-barons-2012-3 [https://perma.cc/MCE5-DRQL].
9
Id.
10
See Fay, supra note 8.
11
Id.
12
What the FTC Does, Federal Trade Comm’n, https://www.ftc.gov/news-events/media-resources/what-ftc-does [https://perma.cc/L3BX-4Y97]; see also Baracskay, supra note 8.
13
Federal Trade Commission Act, 15 U.S.C. § 45 (1914).
14
Sustainability Marketing Claim Regulation and Enforcement, Covington, https://www.cov.com/-/media/files/corporate/sustainability-toolkit/sustainability-toolkit–marketing-claims.pdf [https://perma.cc/S8KJ-2TNK] (last visited Oct. 9, 2022).
15
FTC Issues Revised “Green Guides”, Fed. Trade Comm’n (Oct. 1, 2012), https://www.ftc.gov/news-events/news/press-releases/2012/10/ftc-issues-revised-green-guides [https://perma.cc/RNW2-4DKB].
16
FTC The Green Guides Statement of Basis and Purpose, Fed. Trade Comm’n 1, https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-issues-revised-green-guides/greenguidesstatement.pdf [https://perma.cc/K5P7-5T6B] (last visited Oct. 9, 2022).
17
Id.
18
Id. at 272-73.
19
Id. at 250.
20
Id. at 256-57.
21
Id. at 250.
22
Id. (stating that the FTC has gathered evidence indicating the term “sustainable” can convey a non-environmental significance).
23
Id.
24
Id.
25
Amy De Klerk, Understanding the Importance of Traceability in Sustainable Fashion, Harper’s Bazaar (June 8, 2022), https://www.harpersbazaar.com/uk/fashion/a40214312/traceability/ [https://perma.cc/CSS7-EEAR].
26
Lauren Bravo, Fashion Traceability Is Confusing – Here’s What You Need to Know, Good On You (Mar. 14, 2022), https://goodonyou.eco/fashion-traceability/ [https://perma.cc/S5G7-FQVS].
27
See De Klerk, supra note 25.
28
Traceability in Clothing Industry: What It Is And Why It Is Important, Rifo-lab.com, https://rifo-lab.com/en/blogs/blog-di-rifo/tracciabilita-industria-abbigliamento [https://perma.cc/4MNP-ANFR] (last visited Oct. 9, 2022).
29
Solene Rauturier, What Are the More Sustainable Fabrics On the Market Right Now?, Good On You (July 15, 2022), https://goodonyou.eco/most-sustainable-fabrics/ [https://perma.cc/2JWB-QPUT].
30
See Dottle & Gu, supra note 3.
31
Id.
32
Howell et al., Sustainability Advertising: Key Takeaways, Perkins Coie (Sept. 8, 2021), https://www.perkinscoie.com/en/news-insights/ftc-green-guides.html [https://perma.cc/P6EG-LV33].
33
Alden Wicker, H&M Is Being Sued for Greenwashing. What Does That Mean for Fashion?, The Cut (Aug. 19, 2022), https://www.thecut.com/2022/08/h-and-m-greenwashing-fashion.html [https://perma.cc/VFZ3-7QW3]; see also Brittany Sierra, H&M Is Being Sued for “Misleading” Sustainability Marketing. What Does This Mean for the Future of Greenwashing?, Sustainable Fashion Forum, https://www.thesustainablefashionforum.com/pages/hm-is-being-sued-for-misleading-sustainability-marketing-what-does-this-mean-for-the-future-of-greenwashing [https://perma.cc/L8L7-85KX] (last visited Oct. 14, 2022).
34
Amanda Shendruk, Quartz Investigation: H&M Showed Bogus Environmental Scores for its Clothing, Quartz (July 20, 2022), https://qz.com/2180075/hm-showed-bogus-environmental-higg-index-scores-for-its-clothing/ [https://perma.cc/G6EQ-DMN3]; see also Complaint at 1-2, Commodore v. H&M, No. 7:22-cv-06247 (S.D.N.Y. 2022).
35
See Sierra, supra note 33.
36
See Shendruk, supra note 34; see also Wicker, supra note 33.
37
Complaint at 19, Commodore v. H&M, No. 7:22-cv-06247 (S.D.N.Y. 2022).
38
See Wicker, supra note 33.
39
Karina Bashir & M.E. Bultemeier, A Different Shade of Greenwashing: US Litigation Over Advertising and Product Packaging Claims Accelerates, Clifford Chance (Aug. 17, 2022), https://www.cliffordchance.com/insights/resources/blogs/business-and-human-rights-insights/2022/08/a-different-shade-of-greenwashing-us-litigation-over-advertising-and-product-packaging-claims-accelerates.html [https://perma.cc/KGG4-DYNP] (citing cases in 2022 and 2021 against Allbirds and Canada Goose, respectively).
40
See Sierra, supra note 33 (arguing that many clothiers unintentionally find themselves “greenwashing” when their efforts are often rooted in good faith).
41
See Sustainability Marketing Claim Regulation and Enforcement, supra note 14.
42
Id.
43
See De Klerk, supra note 25.