H&M reprimanded for greenwashing by ACM.
The Netherlands Authority for Consumers and Markets (ACM) has launched a follow-up investigation into H&M, the global fashion giant, following allegations of misleading sustainability claims on the company's website. This move comes after a prior inquiry exposed potential violations of rules governing unfair commercial practices, raising questions about the veracity of H&M's sustainability messaging.
The ACM investigation has unveiled what it considers a significant discrepancy between H&M's sustainability claims and their compliance with regulations. Of particular concern are assertions that H&M's sustainability communications have been potentially misleading, vague, and incorrect, making them a subject of interest for the regulatory body.
Penalty and Remedial Actions
In response to these findings, the ACM has imposed stringent penalties and remedial actions on H&M. Most notably, the fashion retailer has been directed to donate a substantial sum of EUR 500,000 to a non-profit organization specializing in sustainability with no affiliation to H&M. Crucially, this charitable donation will not be eligible for tax deductions.
In addition to the financial penalty, H&M is now compelled to take several corrective measures. In case on-compliance, ACM can impose further fines and investigate new information.
The removal of the "Conscious" and "Conscious Choice" labels from their product offerings.
The elimination of vague sustainability claims, including the contentious "More-sustainable materials" statement.
A mandate to provide explicit clarification regarding the "Better Cotton Initiative (BCI)" and what it entails.
The appointment of compliance officers responsible for monitoring progress and providing regular reports.
A requirement to submit all sustainability communication changes to internal and external legal oversight.
Ongoing reporting to ACM every eight months to track and validate agreed-upon progress.
H&M's Response and Inconsistencies
In response to these regulatory actions, H&M issued the following press release acknowledging the concerns raised by the ACM regarding its sustainability communications.
"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 realise clearer sustainability communication in the future. "
The company stated its commitment to improving the clarity and comprehensiveness of sustainability information provided on its website. Notably, H&M asserted that the ACM's concerns do not pertain to the dissemination of false information. However, there are several inconsistencies in H&M's response that merit closer examination. Considering that every content needs to approved internally before publishing, including legal approvals, it is hard to believe that H&M’s vague sustainability communication is not systematic and of misleading nature. Consequently, H&M failed to take sufficient corrective actions and not only failed to collaborate with authorities but also internally within Marketing & Communication to establish truthful sustainability communication as the following reaction of a H&M Social Media Manager demonstrates.
Furthermore, the assertion that ACM's concerns are unrelated to false information is disputed. Critics argue that vague and misleading information, especially when it primarily benefits the brand, can be seen as deceptive and false. This includes claims such as environmental scorecards, which have been subject to scrutiny and found to her “misleading and, in many cases, outright deceptive” according to Quartz’s investigation.
The Significance of Accountability
This case highlights the growing importance of accountability in sustainability communications. Rather than genuinely embracing sustainability, some companies have been accused of employing tactics that could be seen as misleading consumers into believing their products are more sustainable than they truly are. This practice not only undermines trust but also has broader implications for the credibility of sustainability communications within the industry.
As H&M navigates this regulatory challenge, it faces the imperative to align its sustainability claims with the highest standards of transparency and accuracy. The outcome of this investigation will likely serve as a precedent for how regulators scrutinize and enforce sustainability practices across the retail sector, emphasizing the need for brands to adopt a more accountable approach to their sustainability communications.
𝗥𝗲𝗮𝗱 𝘁𝗵𝗲 𝗳𝘂𝗹𝗹 𝗔𝗖𝗠 𝗖𝗼𝗺𝗺𝗶𝘁𝗺𝗲𝗻𝘁 𝗗𝗲𝗰𝗶𝘀𝗶𝗼𝗻 𝗵𝗲𝗿𝗲:
