Fashion retailer H&M and sporting goods chain Decathlon have made commitments to the Netherlands Authority for Consumers and Markets (ACM) to remove sustainability-related labels from their products and websites, and to improve the use of sustainability claims in the future, following an investigation by the Dutch regulator.
In a statement by ACM about the commitments, the regulator said that H&M and Decathlon have also agreed to provide donations of €400,000 and €500,000, respectively, to sustainable causes, “to compensate for their use of unclear and insufficiently substantiated sustainability claims.”
The announcement comes as regulators worldwide are increasingly focusing on potentially misleading sustainability claims made by companies, particularly in the fashion and clothing sectors. The UK’s Competition and Markets Authority (CMA), for example, recently said that it is investigating fashion retailers ASOS, Boohoo and George at Asda, over eco-friendly and sustainability claims, as part of its broader greenwashing investigation into whether consumers are being misled by the sustainability claims in the marketing of products and services.
The agreements follow an increased focus on sustainability issues by the regulator, beginning with a study in 2020 into the sustainability claims made by businesses, in light of a significant increase in claims emerging across various sectors. ACM sent letters to around 170 businesses last year, including more than 60 active in the clothing sector, pointing out problems that the regulator saw relating to sustainability claims in their sectors, and asking the businesses to review their commercial sustainability claims.
ACM subsequently checked more closely into ten clothing sector businesses, chosen on the basis of revenue, and then launched investigations into six of the companies, including H&M and Decathlon, where the regulator found the most potentially misleading sustainability claims.
In its investigation, ACM found that H&M uses sustainability claims such as “Conscious” and “Conscious Choice,” without explaining what they mean, or providing a description of the sustainability benefits of the products. Additionally, ACM pointed out several practices by the company in which it appears to make sustainability claims about products that may incorrectly give the impression of their sustainability benefits, or guaranteeing that a specific product is made with sustainable materials.
Similarly, Decathlon was found to use the “Ecodesign” sustainability label without specifying the benefits behind the claim, and to provide insufficient information about its “Environmental labelling system.”
ACM listed several commitments by H&M following the investigation, including removing the “Conscious” and “Conscious Choice” labels, at least until it can comply with relevant rules and regulations, and to assess how “it can communicate best to consumers the sustainability benefits of its products.” H&M will also remove the “more-sustainable materials” heading form product descriptions, and add information in brackets if more-sustainable materials have been used, among other changes on its website relating to sustainability claims of its product backgrounds.
Decathlon committed to temporarily remove all sustainability claims from its website, and to implement improvements and explanations on the claims.
ACM board member Cateautje Hijmans van den Bergh, said:
“Consumers that wish to make sustainable choices must be able to have confidence in the veracity of the claims that businesses make on their products or websites. We are pleased to see that these companies have acknowledged that they should have informed consumers more clearly about the sustainability aspects of their products, and that they will adjust various sustainability claims and their substantiations. They will also take measures to inform their customers better in the future.”
ESG Today reached out to H&M for commentary on the regulator’s findings and the company’s new commitments. The company provided the following statement:
H&M has taken note of the concerns raised by the Netherlands Authority for Consumer & Markets (“ACM”) regarding its sustainability communications online in the Netherlands. We acknowledge that the information on sustainability on our website could have been provided more clearly and more comprehensive. Changes are being made through which we commit to better informing our customers about the composition of our products and thus improving our sustainability communications. Moving forward, it is our aim to do better in sharing more comprehensive and elaborate information about our sustainability efforts. We highlight that the concerns raised by the ACM have not been about providing false information. H&M continuously undertakes measures regarding its operations to maintain fully compliant with applicable laws and regulations and hopes that through its open and interactive dialogue with the ACM, it can realize clearer sustainability communication in the future.
Transparency, also regarding product information, has always been a cornerstone of our sustainability strategy. We have been committed to increasing our level of transparency for many years. It allows our customers to make informed purchasing decisions. Today, clear legal frameworks around sustainability communication are lacking. In order to create progress, both H&M as a company and the industry need to start taking collective action now. As a company, H&M is committed to learn and adapt.