The fast fashion industry is undergoing massive growth triggered by the constant need to reshape consumer needs, behaviors, and preferences. Fashion companies are pressured to consistently produce new designs in large volumes to meet this high demand. The massive production of these clothes exerts extreme pressure on the environment (Sagapova & Buchtele, 2022). Pressured to keep up with the needs and environmental sustainability principles and policies of different states, companies have significantly resorted to greenwashing to stay afloat. Unfortunately, greenwashing exerts disastrous effects on the environment blurring global efforts to achieve environmental sustainability and mitigate climate change. Greenwashing is an environmental concern in a world where businesses strive to combat climate change (Yang & Nguyen, 2020). The 21st century has seen several companies globally use appealing green ideas in PR strategies and marketing to draw attention to the brand itself. Most of these strategies are under the umbrella of greenwashing and are used to create a false narrative and impression among consumers about the sustainability of the company or product when they harm the planet and the environment even more (Netto, Sobral, Ribeiro, & Soares, 2020). Greenwashing undercuts companies utilizing sustainable practices making it challenging for environmentally conscious consumers to go for the products. In the long run, it undermines consumer trust in genuine, ecologically friendly, sustainable brands. Using H&M as a case study, this research argues that greenwashing is a conservational concern in a world where businesses strive to combat climate change calling for the need to address and establish practical solutions for effective climate change mitigation.
The Dynamics of Greenwashing in the Fast Fashion Industry
Greenwashing is a term that traces its foundation back to 1980 when environmentalist Jay Westerveld described it as strategy companies deliberately use to frame their practices and products as green. Greenwashing encompasses creating a perfect image of practice, product, and service under the pretext that the production of these services and products is environmentally friendly when in reality, these practices are hazardous to the environment (Aggarwal & Kadyan, 2011). Fast fashion industries produce designer clothes in bulk and sell these products to consumers at considerably lower prices. The production phase is marked by bulks of waste dumped in the environment.
The fashion industry is currently the second largest source of environmental waste. The industry consumes 1.5 trillion liters of water and produces 92 million tons of waste annually (Niinimäki, Peters, Dahlbo, & Perry, 2020). The fast fashion segment accounts for the majority of the annual waste bulk. The majority of these wastes are non-reusable, even when recycled. Jacometti (2019) reports that only 20% of the waste recycled from the fashion industry is reusable. The remaining 80% is dumped in various vulnerable and secretive locations worldwide. On the other end of the supply chain are the consumers who purchase more than they need. As most of these products are of substandard quality, consumers discard them, ending in landfills.
The production phase often involves using various chemicals unscrupulously dumped in rivers. Centrum river is one major recipient of the large bulk of waste from the fashion industry (The World Bank, 2013). The impact of this unsustainable waste disposal is seen in several Indonesian residents battling liver and kidney diseases. Fashion clothes such as fur coats are produced at the expense of an animal’s life. Thousands of animals, specifically rabbits, and raccoons, are slaughtered periodically in China’s Zhejiang and traded to the West (ACTAsia, 2019). The fashion industry relies on the periodic killing of these animals for sustainability. The working conditions in most factories and warehouses are often deplorable, risking workers’ health. However, during marketing, the fashion giants project their products and practices as environmentally friendly, luring consumers into purchasing these products and unknowingly spreading global environmental damage.
The make up-segment, which is also rapidly proliferating as a sub-branch of the fast fashion industry, is also a significant source of environmental waste. Most make-up products are manufactured from Mica (ACTAsia, 2019). Mica is associated with lung scarring when inhaled in large quantities. India is the Worlds primary source of Mica. Unfortunately, 60% of Mica miners in India are children (Bliss, 2017). These children are consistently exposed to chemicals to help complete the fashion supply chain. At the end of the supply chain is an uninformed consumer who quickly buys into the illusion of a perfect product portrayed in the exquisite marketing strategy. Consumers buy these products without questioning their source or the processes involved because the marketing phase portrays them as green.
Psychological Effects of Greenwashing
Brands benefit from the trust they build for their consumers. Trust is a psychological process that can be influenced by creating an illusion of perfection (Javed, Yang, & Gilal, 2020). Greenwashing allows companies to create a green brand image that consumers associate with strong corporate social responsibility. Environmental protection-conscious consumers trust these companies immensely because they represent the consumer’s value. Trust reflects the level of confidence consumers have in a brand. Companies build trust through strategic communication of brand image.
Loyalty reflects a consumer’s willingness to purchase a single brand’s products consistently. Loyalty also reflects the consumer’s relationship with the organization (Javed, Yang, & Gilal, 2020). Organizations need strong brand loyalty to build a large customer base which they can exploit for profits. Companies use greenwashing to build consumer loyalty by passing it off as environmentally friendly. Green consumer loyalty builds from a customer’s commitment to environmental sustainability. H&M helps build and strengthen this loyalty using its conscious choice segment, which purports to reuse, recycle, and reduce waste.
Hennes and Mauritz AB, H&M, is a Swedish multi-billion fashion company headquartered in Västerå. Erling person founded the company in 1947. Today, H&M is one of the biggest fashion companies in the world, priding itself on solid consumer loyalty and brand image created through various marketing strategies (Javed, Yang, & Gilal, 2020). At the foot of its founding is the company’s claim of being entirely green. The company has a comprehensive social responsibility policy that it purports to follow. Unfortunately, the last five years have been rocky as the company has been in public for various greenwashing claims.
H&M’s Corporate Social Responsibility
H&M, in its corporate social responsibility, claims that since its founding, it has remained committed to achieving sustainability across its scope of operation by actively engaging in social activities geared at improving the quality of communities the company impacts (Javed, Yang, & Gilal, 2020; H&M, n.d). The company focuses its CSR on creating awareness of water conservation in countries it operates that experience water shortage and sanitation challenges. The company also claims to hold a significant sport in environmental sustainability through environmental education, which focuses on promoting reusing, recycling, and reducing waste. The company’s 2021 sustainability report indicates that it increased its share of recycling from 5.8% in 2020 to 17.9% in 2021 (H&M Group, 2021). The company has also reduced its plastic packaging by 27.8%. H&M intensified its operating activities, accumulating a cash flow of SEK 45billion.
H&M’s Conscious Choice Segment
In 2013 H&M introduced the Conscious Choice segment. This segment was supposed to comprise a class of clothes and garments made from at least 50% purely environmentally friendly and natural products. The company claimed this segment would contain climate-smart and ethically sustainable products achieved by relying on reusing, recycling, and reducing waste. This segment’s details reflect the company’s corporate social responsibility policy. The environmentally conscious consumers attracted to this segment part with significant premiums to obtain the products as the company’s marketing strategies project this segment as entirely environmentally sustainability conscious.
Law Suits and Clothes Burning Claims
H&M is facing lawsuits and accusations labeled against it for operating contrary to the perceived social corporate responsibilities. In 2017, Bloomberg accused H&M of sending several tons of garments to be burnt in a Denish waste disposal facility. In the same year, a Swedish news 112 site SVT Nyheter accused H&M of burning tonnes of recyclable clothes instead of giving them out to people who could wear them. The company denied these claims stating that burning clothes would be their last alternative to disposing unwanted clothes. Burning is one of the most dangerous forms of waste disposal to the environment.
In June 2022, Quartz published the findings of an investigation conducted on H&M’s environmentally friendly scorecards the company published on its website (Wicker, 2022). Despite being a Sustainable Apparel Coalition Member mandated to maintain its processes within the required Higg measures, H&M continues to greenwash its sustainability scores. The following years have seen multiple lawsuits against the company, complaining of its lack of adherence to the green strategies it claims to use. For instance, in July this year, Chelsea Commodore sued the company for false and misleading sustainability marketing (Chelsea Commodore Vs. H&M LP, 2022). The plaintiff alleged that the company’s conscious choice clothing segment, which is supposed to be environmentally friendly, has low-quality and non-environmentally friendly garments. The company has denied most of these claims as it continues to thrive under the scrutiny of the legal system.
How H&M Achieves Greenwashing
H&M is one of the consumers’ preferred designers of fur coats. Furs coats are manufactured from animal skins obtained from China (ACTAsia, 2019). These courts make their way through the fashion industry at the opportunity cost of mercilessly slaughtered animals to obtain the furs. The transportation of these furs is secretly done through a tightly protected supply chain. Employees working in these warehouses are exposed to poor working conditions with wages below the living wage level (Banerji, Earley, & McAllister, 2018). The company saves on the cost of production by paying low wages and neglecting the better working conditions needs of the workers. The company injects these savings into marketing, branding, and fashion shows to create a green image that lures consumers into going after the company’s high-end premium fashion products. Green advertisement such as green labeling of its conscious choice is H&M”s strategy for exploiting consumers.
H&M’s Ethical Approach to Greenwashing
Ethics is fundamental to business success. Ethics are guiding principles that provide a blueprint for how humans should behave towards one another, the environment, and the ecosystem (Santa Clara University, 2022). The rights ethical lens provides that individuals have the right to be told the truth and prevented from injuries. Consumers have the right to be told the truth behind the products they are presented with to enable them to make conscious decisions. H&M failure to disclose the truth behind their operations that pillared on greenwashing prevents customers from making the right decision and exposes them to injuries harbored on environmental degradation. The utilitarian lens states that ethical action results in the greatest good for more people while reducing harm (Santa Clara University, 2022). H&M has acted contrary to these lenses by concealing the truth behind their products from the consumer and using the consumer as a conduit to spread environmental degradation. The company needs to be in sinc with the challenges consumers face when they are used as channels for propagating environmental degradation and its impacts.
H&M has failed to care for the psychological and physical wellbeing of its onsumers. The care ethical lens requires those engaged in a relationship to be sensitive to the circumsrances that the individual could be facing instead focusing merely on the value the individual brings (Santa Clara University, 2022). H$M has mainly focused on exxploiting the value consumers bring while disregarding their plights. The company burns clothes instead of giving them to the poor. The care ethical lens can incentivize the company to to be more sensitive to the plight of societies. Besides, the common goods lenscalls upon instit utions and people to act in ways that sutains the harmony and good life that xists in communities (Santa Clara University, 2022). Communities are major stakeholders affected by H$M’s greenwashing activities.
Environmental degradation harms humans and ecosystems, contrary to the utilitarian perspective on ethical actions. Lawrence and Weber (2020) emphasize that companies must perform their social and ethical responsibilities to society for value addition. H&M took the initiative to remedy the damage caused by adopting the Sustainable Apparel Coalition’s (SAC) Higg Index, developed to help fast fashion companies to collect fashion supply chain data and rate it for sustainability. The step to remedy the damages the company has caused reflects the company’s efforts to achieve corrective justice for its target consumers and the environment. Corrective justice involves repairing past mistakes (Santa Clara University, 2022). The company can leverage the Higg Index invention to strengtyhen its apriach to sustainability. The Higg Index fosters a similar sustainability language among apparel businesses by enabling these businesses to measure, enhance, and honestly share their social and environmental sustainability. The company’s path to long-term success and regaining lost trust is partly embedded on its appeal to virtue. The virtue lens is an umbrella for integrity, courage, fidelity, self-control, and fairness (Santa Clara University, 2022). The Higg Index fosters transparency and honesty, courage to release information the company might not be willing to expose to competitors, and fidelity to the new path of honesty.
Impacts of Greenwashing on stakeholders and the Environment
The primary stakeholders affected by Greenwashing are the consumers. Companies like H&M use communication strategies like sustainability reporting and green branding to create an image of an ideal company they should relate with (Javed, Yang, & Gilal, 2020). The company uses the pricing strategy to position its products at the top of the market quality scope. Most consumers associate high prices with solid product and service quality. Therefore, consumers willingly rush to buy these products without knowing they become the channel for transferring and dumping them into the environment. Environmental preservation-conscious consumers start to feel psychologically manipulated when they establish that their preferred brands do not implement what to promote. Eventually, the process damages market-driven and incentive-based product development. Greenwashing also distracts investors and consumers from concentrating on the environmental issues the world faces because this practice creates the illusion that other stakeholders are actively involved in environmental sustainability while consumers fund sustainability efforts by paying for the premiums.
Solutions to Greenwashing
Corporate transparency sets a strong foundation for companies to thrive in challenging situations. Greenwashing helps companies thrive in a competitive market by providing consumers with false and misleading information. (Griese, Werner, & Hogg) However, this success is usually not a long-term and viable strategy because when discovered, companies fall deeper than the height they rose while using the strategy. Corporate transparency builds trust and helps companies to secure strong consumer loyalty. H&M and other companies engaged in greenwashing can leverage transparency to build a strong brand reputation. The company must understand that dishonesty and lack of transparency damage its brand reputation. H&M’s stakeholders must work together to ensure the company delivers what it communicates to consumers. An adequate synthesis of the issues gives the company a clear map to actively participate in environmental resource protection and climate change mitigation.
Developing internal Regulations and Implementing them
Rules and regulations provide a road map and guidance for companies to follow. When H&M became a Sustainable Apparel Coalition member, the company uses the material sustainable Index to score each of its products and processes to establish the environmental impact each produces (Adegeest, 2022). Unfortunately, the company has also been greenwashing its sustainable material index by recording unverified and extreme claims on the scorecards, which do not reflect its adherence to environmental sustainability. Internal rules and regulations become handy in such situations (Griese, Werner, & Hogg). While there is no guarantee that H&M can adhere to internal rules as it has failed to adhere to external rules, employees of the organization who design the rule can be moved to fully implement, evaluate, and monitor these rules to ensure they take shape in the company.
Recycling, Reusing or Giving out unused apparel products.
Reports indicate that H&M has been burning tons of clothes that are not used. This approach to waste management undermines environmental sustainability efforts by other stakeholders. Burning is one of the most dangerous activities for the environment (Martin, Meacham, & Tomida, 2016). Several poor people lack basic needs such as clothing. Nevertheless, the company neglects these needs and burns clothes that would serve thousands of individuals. The company needs to review its attitude towards recycling and reusing waste or give the wanted new clothes to the poor people in the community to uphold its social responsibility to the surrounding communities.
The fast fashion industry adjusts to new fashions at relatively short intervals. Bulk production increases costs, which the company seeks to recover by selling a green image that traps consumers. A lean production is a cost-management approach that ensures companies only produce the goods consumers require (International Labour Organization, 2017). Lean production saves costs by reducing waste and enhancing the quality of products. Lean innovation is also associated with high innovation. The company can become more innovative and design better environmentally friendly products.
Modern fast fashion companies are operating in a highly competitive environment. Consumers’ preferences change daily, pressuring fashion companies to dig deeper to meet these preferences. H&M has portrayed itself as a global fashion force to reckon with The company conducts extensive and intensive advertisement to remain afloat in the crowded fashion industry. H&M introduced the Conscious choice fashion segment in 2013. This segment was purported to contain products made from 50% natural products that are environmentally friendly. The company invests highly in advertising these products under the green umbrella, alluring environmental protection-conscious consumers to stick to the brand. In the process, the company uses these consumers to propagate environmental degradation as consumers use and dump these products. Greenwashing is one unethical practice that has been propelled in today’s era. Most companies use deceptive marketing strategies to make unsubstantiated claims about eco-friendly products. In essence, until the technology is in place to properly combat climate change or companies are considerate of other people’s feelings, the “ESG” score will mean nothing. It will have limited effects on the share price. Otherwise, companies can resolve the ethical issue through transparency since consumers want sustainable products.
ACTAsia. (2019). China’s fur trade and its position in the global fur industry. Retrieved from https://www.actasia.org/wp-content/uploads/2019/10/China-Fur-Report-7.4-DIGITAL-2.pdf
Adegeest, D.-A. (2022, July 4). H&M ‘greenwashed’ its sustainability scores, says investigation. Retrieved October 29, 2022, from FashionUnited: https://fashionunited.uk/news/fashion/h-m-greenwashed-its-sustainability-scores-says-investigation/2022070463921
Aggarwal, P., & Kadyan, A. (2011). Greenwashing: The Darker Side Of CSR. Indian Journal of Applied Research, pp. 61–66. doi:15373/2249555X/MAR2014/20
Banerji, S., Earley, K., & McAllister, P. (2018). Review of H&M group’s Roadmap to Fair Living Wage. Ethical Trading Initiative. Retrieved from https://www.ethicaltrade.org/sites/default/files/shared_resources/ETI-HM%20FLWR%20Review_0.pdf
Bliss, S. (2017). Child Labour in India’s Mica Mines: The Global Beauty Industry. Natural Resources. Retrieved from https://www.gtansw.org.au/files/geog_bulletin/2017/3_2017/05_GTANSW%20Bulletin%20_Issue%203%202017_Indias%20Mica%20%20mines.pdf
Chelsea Commodore Vs. H&M LP. (2022). In the United States District Court for the Southern District of New York. Retrieved from https://www.classaction.org/media/commodore-v-h-and-m-hennes-and-mauritz-lp.pdf
Griese, K.-M., Werner, K., & Hogg, J. (n.d.). Avoiding Greenwashing in Event Marketing: An Exploration of Concepts, Literature and Methods. Journal of Management and Sustainability. doi:10.5539/jms.v7n4p1
H&M Group. (2021). Annual and Sustainability Report. Retrieved from https://hmgroup.com/wp-content/uploads/2022/03/HM-Group-Annual-and-Sustainability-Report-2021.pdf
H&M. (n.d). H&M Retail India Corporate Social Responsibility Policy. Retrieved from https://www2.hm.com/en_in/customer-service/corporate-social-responsibility/corporate-social-responsibility-csr-policy.html
International Labour Organization. (2017). Lean Manufacturing Techniques for Textile Industry. Retrieved from https://www.ilo.org/wcmsp5/groups/public/—africa/—ro-abidjan/—sro-cairo/documents/publication/wcms_621441.pdf
Jacometti, V. (2019). Circular Economy and Waste in the Fashion Industry. Laws. Retrieved from file:///C:/Users/User/Downloads/laws-08-00027.pdf
Javed, T., Yang, J., & Gilal, W. G. (2020). The sustainability claims’ impact on the consumer’s green perception and behavioral intention: A case study of H&M. Advances in Management and Applied Economics. Retrieved from https://www.researchgate.net/publication/344348730_The_sustainability_claims’_impact_on_the_consumer’s_green_perception_and_behavioral_intention_A_case_study_of_HM
Lawrence, A., & Weber, J. (2020). Business and Society: Stakeholders, Ethics, Public Policy. New York: McGraw-Hill Education.
Martin, D., Meacham, B. J., & Tomida, M. (2016). Environmental impact of fire. Fire Science Reviews. doi:10.1186/s40038-016-0014-1
Netto, S. V., Sobral , M. F., Ribeiro, A. R., & Soares, G. R. (2020). Concepts and forms of greenwashing: a systematic review. Environmental Science Eur, 32(19).
Niinimäki, K., Peters, G., Dahlbo, H., & Perry, P. (2020). The environmental price of fast fashion. Nature Reviews Earth & Environment. doi:10.1038/s43017-020-0039-9
Sagapova, N., & Buchtele, R. (2022). The Fashion Industry and its Problematic Consequences in the Green Marketing Era a Review. SHS Web of Conferences. doi:10.1051/shsconf/202213501011
Santa Clara University. (2022). A Framework for Ethical Decision Making. Retrieved from https://www.scu.edu/ethics/ethics-resources/a-framework-for-ethical-decision-making/
The World Bank. (2013). Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia. Retrieved from https://www.adb.org/sites/default/files/publication/154493/citarum-river-downstream-impacts-water-pollution.pdf
Wicker, A. (2022). H&M Is Being Sued for Greenwashing. What Does That Mean For Fashion? Retrieved from https://www.thecut.com/2022/08/h-and-m-greenwashing-fashion.html
Yang, Z., & Nguyen, N. (2020). Greenwashing behaviors: Causes, taxonomy, and consequences based on a systematic literature review. Journal of Business Economics and Management, 21(5), 1486-1507.