In an era where the demand for sustainability has become non-negotiable, even fashion giants like Lululemon find themselves under scrutiny for claims about eco-friendly practices. As regulatory agencies crack down on corporate greenwashing—from product labels to ambitious promises in annual reports—companies are increasingly held accountable for their environmental claims. Consumers, now savvier than ever, are quick to call out discrepancies between a brand’s advertised eco-commitments and its actual impact. Even companies themselves have doubts about whether they might be culpable for greenwashing. In a recent study by the Wall Street Journal, nearly 60% of respondents believe that their own company is exaggerating its sustainability efforts.
Overstated Green Claims
Almost every company now displays a sustainability report on its website where it might promise to reduce its carbon footprint or make its products completely recyclable in 10 years. However, without clear science-based targets and data to back them up, companies leave themselves open to reputational and litigation risk when they overstate green claims. A case in point is meatpacking industry giant JBS, which is under investigation for its “Net-Zero by 2040” claim. New York State has sued JBS US for making net zero claims even after agreeing to NAD’s recommendation to discontinue them. Read more about JBS and aspirational claims on Softly’s blog.
Fashion industry giant Lululemon has also found itself in the greenwashing spotlight. Not only is it under investigation by Canada’s Competition Bureau, but a class action lawsuit has been filed in the US. Both inquiries look into Lululemon’s sustainability claims in its Be Planet campaign.
How Does Fashion Pollute the Environment?
Lululemon is part of a 1.7 trillion dollar industry that is one of the biggest polluters on the planet. The textile and clothing industry produces 100 billion new garments annually. Ninety million tons of that clothing ends up in landfills yearly—about one garbage truck full of clothes every second. Much of that is plastic, with the industry generating 42 million tons of plastic waste annually and accounting for 35% of microplastic added to oceans. With these statistics, it’s easy to see why the fashion industry’s sustainability efforts are under scrutiny.
Lululemon wants to counteract these environmental transgressions, and its 2020 Be Planet campaign promised to “avoid environmental harm and contribute to restoring a healthy planet.” This campaign has committed to using sustainable materials in 75% of its products by 2025. It also promises product circularity by offering customers options to extend the life of what they buy through reselling, repairing, or recycling options. According to regulators and consumers, this may be too good to be true. They claim Lululemon’s goals are vague, and its current production and growth are harming the planet more than these aspirational claims will help it.
Complaint Against LuluLemon
Watchdog organization Stand.earth filed a complaint against Lululemon with Canada’s Competition Bureau in April of this year, alleging that the company misleads customers about its environmental impact. According to the complaint, Lululemon’s carbon pollution has doubled since its campaign began; the company’s reliance on fossil fuels contributes to climate pollution; and its products cannot be effectively recycled, are not biodegradable, and release microplastics into the waterways and oceans.
Violation of Canada’s Competition Act
Stand.earth’s complaint cites Canada’s Competition Act and its best practices in its complaint against Lululemon. Canada recently updated its Competition Act to include enforceable regulations on greenwashing. It “prohibits businesses from making false or misleading environmental claims to promote a service, product or business interest.”
The CCB provides six guidelines or “best practices” that organizations must follow when making environmental claims. According to the complaint, Lululemon is not following these guidelines.
Follow best practices by making sure that your claims:
Competition Bureau Canada
1. are truthful and aren’t misleading;
2. are specific: be precise about the environmental benefits of your product;
3. are substantiated and verifiable: claims must be tested and all tests must be adequate and proper;
4. do not result in misinterpretations;
5. do not exaggerate the environmental benefits of your product; and
6. do not imply that your product is endorsed by a third-party organization if it isn’t
If the CCB finds that Lululemon has made false claims and misled the public, Stand.earth is asking the company to completely remove the Be Planet marketing campaign, issue a formal apology to all Canadian customers for misleading them, and pay a fine of up to 3% of Lululemon’s annual worldwide gross revenues, which could amount to $400 million USD.
US Litigation: Gyani et al. v. Lululemon Athletica
On the heels of this complaint, a class action lawsuit (Gyani et al. v. Lululemon Athletica) was filed in July, alleging that Lululemon falsely claims it will become more sustainable. The suit states that instead of reducing its environmental impact, Lululemon’s actions and products harm the environment by contributing to a substantial amount of greenhouse gas emissions. Additionally, the suit claims that since the beginning of the Be Planet campaign in 2020, Lululemon’s greenhouse gas emissions have more than doubled. This lawsuit cites the FTC Green Guides and Florida state legislation in its case against Lululemon.
Violation of FTC Green Guides and Florida Law
The Florida lawsuit states that the Be Planet campaign “violates virtually every single guideline for environmental marketing claims set forth in the Federal Trade Commission’s ‘Green Guides.’” Specifically, the FTC states that:
“It is deceptive to misrepresent, directly or by implication, that a product, package, or service offers a general environmental benefit…Because it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmental benefit claims.” (FTC Green Guides § 260.4(b)).
By violating the Green Guides, the suit alleges that the Be Planet campaign is greenwashing.
The suit also relies on Florida State State Statutes. It cites violation of the Florida Deceptive and Unfair Trade Practices Act, (Fla. Sta. §§ 501), and the Fraudulent Practice Act (Fla. Stat. §§ 817.41), in which misleading advertising is prohibited.
The Gyani suit is still pending, but the allegations against Lululemon have brought them into the spotlight, potentially leading to more lawsuits in the future.
More Fashion Retailers Under Investigation
Fashion retailers in the United Kingdom have also been accused of greenwashing. After the UK’s Competition and Marketing Authority investigated three large fashion retailers (ASOS, Boohoo, and George at Asda), these companies consented to modify their practices in response to the CMA’s concerns regarding environmental claims. In an open letter to the fashion sector, the CMA put the entire industry on alert by informing them of these results and reminding them of their responsibilities under consumer protection law.
In the US, two class action lawsuits against fashion retailer H&M for green marketing claims are pending.
- Commodore et al. v. H&M Hennes & Mauritz LP: misleadingly marketing clothing as sustainable.
- Sally et al. v. H&M Hennes & Mauritz LP: misleading recycled and organic content claims.
Stay on Top of your Sustainability Efforts
Legislation is changing quickly. Canada recently updated its Competition Act to address greenwashing. The FTC Green Guides are under revision, with the outcome forthcoming, and as the FTC revises them, states are stepping up with legislation on green claims.
With all these changes happening, companies must find ways to stay informed about current legislation and regulations when creating a sustainability report that can withstand legal scrutiny. Understanding these frameworks not only ensures compliance but also builds credibility with stakeholders.
It’s important to have resources to stay in compliance with green regulations. The Wall Street Journal highlights these essential tools for advancing sustainability:
- Appoint a dedicated sustainability leader.
- Ensure support from senior management.
- Utilize advanced measurement tools.
- Provide education for employees and executives.
Softly’s Green Claims Navigator is another invaluable tool for enhancing green marketing efforts. It provides a comprehensive overview of federal, state, and international regulations related to sustainability. In addition, it tracks relevant lawsuits and offers insights into claim-specific certifications. This information allows businesses to verify their green claims before making commitments, minimizing the risk of misleading assertions and enhancing transparency in their sustainability practices. By utilizing this tool, companies can confidently navigate the complexities of environmental compliance and present truthful, substantiated claims in their sustainability initiatives.
The focus on corporate sustainability claims is an opportunity for companies to embrace honesty about their environmental impacts. As consumers become more discerning, brands must back their promises with genuine data and clear goals. Moving forward, a genuine commitment to transparency and sustainability will lead to lasting success in a changing world.
References
- Global Executives Say Greenwashing Remains Rife – WSJ
- Tolerance Drops for Net Zero Claims – Softly
- Global apparel market – statistics & facts | Statista
- 17 Most Worrying Textile Waste Statistics & Facts [2024]
- These facts show how unsustainable the fashion industry is
- Chart: Where the Ocean’s Microplastics Come From | Statista
- IN THE MATTER OF: – An application pursuant to s. 9(1)(b) of the Competition Act, RSC 1985, c C-34 requesting the Commissioner cause an inquiry to be made into the conduct of Lululemon Athletica Inc.
- Environmental claims and greenwashing
- Competition Bureau opens formal investigation into Lululemon in response to complaint filed by Stand.earth
- Gyani et al. v. Lululemon Athletica Inc. et al. 24-cv-22651, S.D. Fla. (July 2024)
- Chapter 501 – 2012 Florida Statutes – The Florida Senate
- Chapter 817 Section 41 – 2024 Florida Statutes
- Fashion greenwashing: investigation into ASOS, Boohoo and Asda – GOV.UK
- Open letter to the fashion sector
- Commodore et al. v. H&M Hennes & Mauritz LP 22-cv-6247, S.D.N.Y. (July 2022)
- Sally et al. v. H&M Hennes & Mauritz LP 23-cv-1451, E.D. Mo. (Nov. 2023)