In our article dated 3 May 2021, we wrote that the Dutch Authority for Consumers & Markets (ACM) announced that it launched investigations into misleading sustainability claims in the fashion, dairy and energy sector. The ACM sent letters to more than 170 companies in these three sectors requesting them to check the accuracy of their sustainability claims in all their “communication channels” (both online and offline), and if necessary, adjust these claims to comply with the unfair commercial practices legislation. In particular, the ACM requested companies to comply with the Guidelines Sustainability Claims it published on 28 January 2021. In these Guidelines the ACM has drawn up five rules of thumb for businesses to prevent their sustainability claims from being unclear, incorrect or misleading for consumers.
On 4 November 2021, the ACM announced that – on the basis of its investigations into the clothing sector – it will launch follow-up investigations into six clothing companies where the ACM spotted the highest number of sustainability claims. ACM found the following ‘bad examples’ in the clothing sector:
- The use of vague/absolute and general terms such as ‘sustainable’ or ‘ethical’ on either clothing tags or on the website of the company without any proper explanation of these terms.
- Offering a special sustainability collection, without being clear what criteria are used to select the products or what the sustainability benefit is of each product.
- ‘Organic cotton’ claims if a t-shirt contains less than 95% organic cotton (i.e. the official standard for using the term ‘organic cotton’).
For the follow-up investigations, ACM requested information from two Dutch and four non-Dutch clothing companies. After assessing the information, ACM will ask the authorities in the countries of the foreign companies to take action against those companies.
ACM explains: “We carried out this investigation because consumers that want to buy sustainable products are entitled to correct, clear, and verifiable information. In addition, we wish to protect the companies that do follow the rules against their competitors that employ misleading practices. We see that many clothing companies like to present themselves as sustainable companies, but that they often exaggerate their claims, and that these claims are often not substantiated.” ACM stresses that they will “now take action against such practices”. ACM confirms that this may include imposing fines on companies. ACM's fines can amount to up to EUR 900,000 per fine. In some cases, fines can be even higher, and be a percentage of the total annual turnover.
Would you like to know more about this topic? Please do not hesitate to reach out to Renske Sinke or Martine de Koning.
