Europe’s biggest online fashion retailer, Zalando, recently agreed to dramatically and rapidly overhaul its sustainability marketing in the face of pressure by the European Commission. This is yet another example of why companies need to be extremely careful when making environmental claims in their advertising. Such claims are facing increasing regulatory scrutiny and activist litigation in the European Union, the United Kingdom, the United States and elsewhere around the globe.
Problematic Green Claims
The type of alleged “greenwashing” claims targeted in the Zalando case are similar to those that have drawn fire elsewhere. Following a year-long “dialogue” with the Commission, Zalando committed to removing broad “sustainability” flags and vague leaf or tree icons displayed next to its products on its websites. Specifically, Zalando committed to:
- removing the initially used sustainability flag from all webpages.
- removing all misleading environmental icons that were displayed next to products (such as a leaf or a tree).
- no longer using the term “sustainability,” or other unjustified terms indicating an environmental and/or ethical benefit; going forward, Zalando will provide clear information about the specific product, for example, a percentage figure of how much recycled material is used.
- removing the icons and the term “sustainability” also from the filter and allowing consumers to filter and select products based on specific product qualities.
- providing clear and specific information on the product’s environmental and/or ethical benefit at the product detail page.
- revising the “Sustainability Page” by introducing two new webpages: one with more information on the product standards and one with information about Zalando’s sustainability-related approaches and strategies.
- ensuring that Zalando’s environmental claims are based on aspects which are significant for the environment.
See European Commission Press Release IP/24/948, Zalando Commits to Provide Clearer Information for Consumer Following EU Action (Feb. 22, 2024).
When making sustainability claims, it is important that they have taken the necessary steps to substantiate those claims and that they are constructed to avoid overbreadth. General claims that a product is “sustainable,” “green” or “eco-friendly,” without explanation or standard, are insufficient and thus are likely to draw the type of regulatory attention faced by Zalando.
Regulatory Scrutiny and Litigation Regarding Green Claims
Zalando is unlikely to be the last company to face scrutiny from regulatory bodies, especially as heightened greenwashing regulations are surfacing throughout the world. The European Union is tightening its legal framework on misleading environmental claims. Following new rules within the Unfair Commercial Practices Directive and the Consumer Rights Directive about information adequacy for consumers, the European Commission has proposed a new Directive on green claims substantiation, which aims to stop companies from making misleading claims about the environmental merits of their products and services. In addition, the U.S. Federal Trade Commission is currently updating its Green Guides, while the U.K.’s Financial Conduct Authority is finalizing guidance on its anti-greenwashing rule. Moreover, France recently passed legislation making it exceedingly difficult to make any “carbon neutral” or “climate neutral” type claims in the country and other jurisdictions such as California are also passing legislation targeting climate claims.
In the U.S., there has also been uptick in litigation brought by class action and private litigants targeting green claims, impacting various industries from food and consumer products to airlines and beyond.
As the regulatory and litigation attention on green claims continues to heat up, companies can—and should—continue to highlight to customers their important sustainability successes. However, when doing so, they need to carefully craft and substantiate the claims they are making.