Luxury brands face 'greenwashing' lawsuits

Class action suit alleges ‘greenwashing’ at luxury clothing brand

What you probably already know: People are increasingly concerned about the environmental impact of the products they buy, and are digging a little deeper on some companies’ claims that their products are sustainable. Last week, a class action suit was filed against Lululemon for its “Be Planet” marketing campaign, which the plaintiffs allege creates the impression the company is doing more for the environment than it is. Chinese company Shein has announced a $270 million investment to reduce the waste of its fast-fashion clothing, in large part due to criticism when it announced its initial public offering.

Why? A Wall Street Journal story quotes a prominent class action attorney saying that “greenwashing” lawsuits are the “next frontier” in class action litigation, in large part because many companies announced very prominent campaigns to reduce their carbon footprint over the last decade, and those claims will now be tested. The class action suit against Lululemon claims the company’s emissions have doubled since 2020, despite its pledges to reduce emissions and water usage.

What it means: H&M and Nike have also been the target of class action suits for “greenwashing” in recent years, though neither case went anywhere. Still, for board directors and executives, allegations of “greenwashing” are a very real threat to the company. Many companies have refined or adjusted their environmental goals to make sure they’re realistic ahead of important deadlines.

What happens now? The Federal Trade Commission is working to update its Green Guides, which are standards for advertising based on the assertion of environmental benefits. Currently, according to the WSJ, the rules aren’t clear on what proof companies need to offer to support their claims.

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