Today, an “eco-friendly” label without evidence can constitute a legal violation in several regions, particularly in the European Union. Greenwashing has now become a real risk, including for Indonesian fashion brands that sell in the global market. Three important things to know: (a) greenwashing has a long history and its definition continues to expand; (b) regulators in Europe emphasize evidence and reliability; and (c) greenwashing in Indonesia is not entirely without legal rules.

Greenwashing is the practice of making environmental claims that are untrue or misleading, such as “sustainable,” “eco-friendly,” or “green.” Greenwashing is generally used to claim that a product is produced in an environmentally friendly manner or does not have a significant impact on the environment. In the fashion industry, greenwashing is often used as a sales strategy, whether on product labels, in campaigns, on websites, or through other variables that serve as the points where the product meets the consumer.Sejarah Greenwashing.

In the era of Environmental, Social, and Governance (ESG) principles, the definition of greenwashing has been expanded: it is no longer limited to environmental claims, but also encompasses the social and governance aspects of business practices. Moreover, greenwashing is now specifically regulated under positive law in a number of jurisdictions, so the practice can carry legal consequences.

Reading Greenwashing Over Time

Greenwashing is not a new issue. The word “greenwashing” itself was first introduced by an environmentalist named Jay Westerveld in an essay in 1986. The essay originated from his experience in 1983 at a resort in Fiji, where he found a card urging guests to reuse towels in order to protect the ocean and coral reefs. Ironically, the resort was building new bungalows near the same reef, and the appeal also saved laundry costs. Out of his unease over this irony, Westerveld wrote an essay on the hospitality industry that gave birth to the term “greenwashing.” Moreover, in the mid-1980s Chevron launched an advertising series called “People Do” that portrayed the company as caring about the environment, while its environmental track record was being questioned. This was the historical climate that led environmentalists, Westerveld among them, to reflect on classic examples of greenwashing practices.

From 2000s to 2010s, greenwashing was increasingly used as a sales strategy by various industries, the fashion industry included. This practice was first 2 initiated by British Petroleum (BP) with the slogan “Beyond Petroleum,” which shifted the company’s image from an oil seller to a company that appeared to be in the midst of transitioning to renewable energy. Subsequently, in the fashion industry, one of the best-documented cases is H&M’s “Conscious” collection. As a major fashion brand, H&M committed to and promoted environmentally friendly products, such as recyclable polyester. This image made H&M look as though it were a “green” company. However, the Norwegian consumer authority has questioned this collection since 2019, and in 2022 the Dutch consumer regulator (ACM) assessed that claims such as “Conscious” were unclear and insufficiently supported by evidence. H&M stated that the matter did not involve false information.

The definition of greenwashing today can no longer be read as a sales strategy in the environmental context alone, but encompasses other aspects such as claims regarding workers’ welfare, affected communities, and responsible, transparent, and accountable governance practices, in line with the objectives of ESG. For brand owners, claims about wages, working conditions, and the supply chain now carry the same risk as claims about raw materials and environmental impact.

Legal Risk of Greenwashing Practices

The legal risks of greenwashing naturally differ in each market, but the direction remains the same: regulators now demand proof, not merely promises. Indonesian fashion brands need to map three main markets. In the European Union, the provisions of Directive 2024/825 on Empowering Consumers for the Green Transition (ECGT) are now in force.This rule prohibits generic environmental claims such as “eco-friendly” or “green” without proof of superior environmental performance, prohibits carbon-neutral claims based on offsets, and prohibits claims that give the impression of applying to the entire product when they in fact apply to only part of it.

The more comprehensive Green Claims Directive is not currently in force because the European Commission halted its legislative process in 2025. For Indonesian brands, the ECGT is relevant so long as the claims are directed at EU consumers, for example through websites or marketplaces. In my view, this is the real impact of soft law on business practice, where the labels and branding strategy that you use carry legal consequences even though they fall outside the jurisdiction in which your company operates.

As of April 2025, the UK government, through the Competition and Markets Authority (CMA), has been able to impose direct fines of up to 10% of global turnover for consumer law violations, including greenwashing, under the Digital Markets, Competition and Consumers Act 2024. However, before imposing sanctions, the CMA had already taken a positive initiative by publishing the Green Claims Code and specific guidance for fashion businesses.

In Indonesia, there is not yet any regulation that specifically and explicitly regulates greenwashing or environmental claims, but that does not mean it comes without risk. Law Number 8 of 1999 on Consumer Protection (hereinafter referred to as “Law 8/1999”) guarantees consumers’ right to truthful information provided by business actors, prohibits goods or services that do not conform to the promises made on labels or in advertisements, and prohibits untrue or misleading statements. Law 8/1999 sets sanctions for such violations against business actors in the form of a fairly lengthy term of imprisonment or a fairly substantial administrative fine. As for the environmental law regime, Law Number 32 of 2009 on Environmental Protection and Management requires business actors to provide environmental information truthfully, accurately, openly, and in a timely manner. In my view, the greatest risk for fashion brands in Indonesia is the assumption that the absence of domestic rules means being safe and free of consequences.

Conclusion

Greenwashing has shifted from a matter of image and sales strategy to a matter of evidence and legal risk. Claims such as “sustainable” or “eco-friendly” that were once regarded as ordinary marketing language can now lead to the withdrawal of labels, fines, and regulatory monitoring, especially for brands that sell to the European Union and the United Kingdom. Several things that fashion brand owners can do are: (a) conducting a claims audit by compiling the history of environmental, social, and governance claims on labels, in campaigns, and on websites in order to mitigate the legal, reputational, and even financial risks that will arise in the future; (b) mapping the evidence and preparing the materiality that you wish to convert into a branding strategy by undertaking reliable certification or disclosure so that it can be proven; and (c) converting and aligning the certifications and compliance that have been determined with the intended target market in order to ensure and utilize those claims as an established sales strategy.

Key Takeaways

Greenwashing is the practice of making environmental, social, or governance claims that are untrue or misleading. Its scope has expanded as ESG has developed.

The term originated from Jay Westerveld’s 1986 essay on the hospitality industry. Chevron and BP are classic examples, and H&M’s “Conscious” collection is the best-documented fashion case.

The EU’s ECGT has prohibited generic environmental claims without evidence, offset-based carbon-neutral claims, and partial claims that give the impression of applying to the entire product. This rule applies to claims directed at EU consumers.

Since April 2025, the UK’s CMA has been able to impose fines of up to 10% of global turnover for consumer law violations, including greenwashing.

Indonesia does not yet have specific regulations on environmental claims, but Law 8/1999 and Law 32/2009 can already be used to take action against misleading claims.

H&M accepted ACM’s commitments without a fine (labels withdrawn, a €500,000 donation, two years of monitoring).

Shein was fined €1 million by Italy’s AGCM in August 2025.

Best practice: claims that are specific, reliable, documented per product, and tailored to the target market.