H&M is Being Sued Over “Misleading” Sustainability Marketing, Product Scorecards

Image: H&M


H&M is Being Sued Over “Misleading” Sustainability Marketing, Product Scorecards

H&M is “taking advantage of consumers’ interest” in sustainability and products that “do not harm the environment,” a new false advertising lawsuit asserts. According to the proposed class action complaint that she filed in a New York federal court on ...

July 28, 2022 - By TFL

H&M is Being Sued Over “Misleading” Sustainability Marketing, Product Scorecards

Image : H&M

Case Documentation

H&M is Being Sued Over “Misleading” Sustainability Marketing, Product Scorecards

H&M is “taking advantage of consumers’ interest” in sustainability and products that “do not harm the environment,” a new false advertising lawsuit asserts. According to the proposed class action complaint that she filed in a New York federal court on July 22, Plaintiff Chelsea Commodore claims that in an attempt to target the growing segment of eco-conscious consumers who are willing to pay more for “sustainably-made” garments and accessories, the Swedish fast fashion giant prominently incorporated “‘environmental scorecards’ for its products called ‘Sustainability Profiles’” into the labeling, packaging, and marketing materials for hundreds of its offerings – only to ultimately remove them after being called out for using “falsified information that did not comport with the underlying data.” 

In the newly-filed complaint, Commodore alleges that “despite its position as a fast-fashion giant, H&M has created an extensive marketing scheme to ‘greenwash’ its products” in order to present them “as environmentally-friendly when they are not.” Part of this overarching effort comes in the form of its “misleading” environmental scorecards, which are prominently displayed on “green hang tags, in-store signage, and online marketing.” One Sustainability Profile that was marketed by H&M, for example, “claimed that a dress was made with 20% less water on average,” when an independent investigation by news outlet Quartz revealed that the dress “was actually made with 20% more water.” Another example showed that H&M presented “a particular product as being produced with 30% less water” when the Higg website, which is where H&M procured such information, “showed that the item was ‘actually made with 31% more water, making it worse than conventional materials,’” Commodore alleges. 

By “conveniently and egregiously” presenting negative results as positive ones, such as turning “‘more water’ into ‘less water’ [on its] scorecards,” Commodore accuses H&M of “falsif[ying]” its Sustainability Profiles with “inaccurate and misleading data” and “misrepresent[ing] its products as being better for the environment than comparable garments, when they are not.” And to make matters worse, Commodore alleges that H&M did this “for each and every Sustainability Profile scorecard.” 

Against this background, Commodore contends that “a majority” of the products that H&M markets as being sustainably-made are “no more sustainable than items in [its] main collection, which are also not sustainable” – and doing so to the detriment of consumers, “who pay a price premium in the belief that they are buying truly sustainable and environmentally friendly clothing.” (To play devil’s advocate here for a moment: Reasonable consumers should probably know that H&M’s high-volume turn-over of $25 “conscious” cardigans and $40 “sustainable” dresses is not “truly sustainable” or “environmentally friendly,” no?)

In addition to its allegedly problematic Sustainability Profiles, Commodore claims that “H&M makes various other misrepresentations concerning the purportedly sustainable nature of its products,” including that its products are “‘conscious,’ a ‘conscious choice,’ a ‘shortcut to sustainable choices,’ made from ‘sustainable materials,’ ‘close the loop,’ and that H&M will prevent its textiles ‘from going to landfill’ through its recycling program.” (H&M will almost certainly push back here, particularly when it comes to its use of terms like “conscious,” which it will undoubtedly argue is a subjective, non-specific, unmeasurable and/or vague statement, and thus, not actionable.)

Beyond that, H&M makes further misrepresentations, per Commodore, about the nature of the products in its Conscious Collection, including that they contain “at least 50% sustainable materials, such as organic cotton and recycled polyester,” when in reality, the products “are comprised of indisputably unsustainable materials, like polyester,” which are “not sustainable, as polyester does not biodegrade, sheds toxic microfibers, and is not recyclable.” These products “contain a higher percentage of synthetics than the main collection,” Commodore claims, but H&M “gives consumers the impression that the materials used in its products are nonetheless environmentally sustainable.” And still yet, H&M’s representations that “old clothes are simply turned into new garments, or that clothes will not end up in a landfill” – thanks to its recycling initiative – are “misleading,” according to the complaint. “Recycling solutions either do not exist or are not commercially available at scale for the vast majority of the products,” Commodore claims, and even still, she argues that “it would take H&M more than a decade to recycle what it sells in a matter of days.” 

H&M Sustainability

With the foregoing in mind, Commodore claims that H&M is engaging in deceptive acts or practices and false advertising in violation of New York General Business Law by way of its alleged “misrepresent[ation of] the sustainability and attributes of the products to induce consumers to purchase H&M’s products,” and given that “a consumer acting reasonably under the circumstances would reasonably believe those claims, particularly given that H&M is a nationally recognized and well-established company.” (Commodore further asserts that H&M “seeks to differentiate itself from other fashion products by greenwashing the products and its brand,” which is “a deceptive act and an unfair practice because [H&M], one of fashion’s greatest polluters, knows that the products are not sustainable and contribute to significant negative environmental harms over the entire product life cycle from cultivation to incineration.”) She also sets out a claim of unjust enrichment, arguing that H&M benefitted from such unfair acts. 

As for injury, Commodore, who paid a total of $50 for a sweater and a cardigan from H&M’s Conscious Collection, claims that she and “members of the class have suffered economic injury because [they] would not have purchased the products or paid as much if the true facts had been known, [thereby, causing them to] suffer damages.” 

In addition to seeking injunctive relief and monetary damages, Commodore is looking to get the court to certify her proposed class action in order to enable other consumers who purchased H&M products that contained “a Sustainability Profile or a Sustainability Misrepresentation” to join in the action. 

The case comes amid a boom in sustainability-focused marketing endeavors by brands looking to cater to eco-conscious consumers, complete with a proliferation of misleading “sustainable” marketing – from consumer-facing ads (complete with sustainability-inspired logos) to language in investor filings. To date, most brands have been able to avoid litigation and regulatory action in response to potentially misleading sustainability and broader ESG claims, but that may be changing.

Commodore’s suit follows closely from an early win for a proposed class action plaintiff who filed suit against ALDI, with a federal court in Illinois refusing to toss out the case, which accuses the supermarket chain of allegedly engaging in a scheme to “falsely and deceptively market” its salmon as sustainably sourced despite such products coming from farms that utilize “environmentally destructive and unsustainable practices.” In an order in May, the court found that plaintiff Jessica Rawson sufficiently pled her false advertising, breach of state consumer protection statute, and breach of express warranty claims, which largely center on ALDI’s use of a “Simple. Sustainable. Seafood.” label, while the supermarket chain failed to persuade the court with arguments in its defense, including that the label constitutes non-actionable puffery and that Rawson failed to allege a cognizable injury.

The ALDI case and a growing number of lawsuits (this one, included) and rising attention from regulators across the globe to ESG and climate-related disclosures/marketing is increasing the risk for companies that are promoting products and services as “sustainable” (or “eco-friendly,” “green,” “responsibly-made,” and/or “ethical,” among other widely-used buzzwords) without being able to substantiate these claims. As a result, Gowling WLG’s Kate Hawkins, Shannon Uhera and Céline Bey state that brands would be well suited to avoid making representations (no matter the medium) that are not substantiated and verifiable, noting that “claims must be based on robust evidence.” Additionally, companies are encouraged to avoid hiding information about the environmental impact of a product or service or only cherry-picking the positive environmental aspects, and/or exaggerating the environmental benefits of their efforts. 

And in what may be the biggest departure from past practice, which saw no shortage of companies put forth sustainability-centric marketing that involved vague and/or overly ambitious statements in order to skirt false advertising claims, Hawkins, Uhera and Bey say that companies have to be careful about “making claims about [their] environmental ambitions unless the claims are in proportion to actual efforts, there is a clear, documented and verifiable plan (which is detailed and realistic) as to how the business is going to meet those goals, and the business monitors progress against that plan.” At the same time, they caution against companies being “vague or ambiguous in their claims about the environmental benefits of a product or service” in order to avoid coming in the crosshairs of rising litigation over even seemingly vague assertions on the ESG front.

A rep for H&M declined to comment.

The case is Commodore v. H&M HENNES & MAURITZ LP, 7:22-cv-06247 (SDNY).

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