Fashion, Commercial Communication, and Legal Risks: ESG, Greenwashing, and Industrial Property

In the fashion industry, sustainability and ESG (Environmental, Social, Governance) values are strategic branding levers. However, their use in commercial communication entails significant legal risks. Misleading statements may amount to deceptive advertising, unfair competition, and antitrust infringements, pursuant to Article 21 of the Italian Consumer Code (Legislative Decree No. 206/2005) and Directive 2005/29/EC on unfair commercial practices.

Regulatory authorities play a central role in supervising such communications. The Italian Competition Authority (AGCM) oversees the accuracy of commercial messages, including green claims, and may impose monetary fines or adopt precautionary measures. The Institute of Advertising Self-Regulation (IAP) intervenes in advertising campaigns, requiring modifications or withdrawal of misleading messages. Judicial authorities may also suspend commercial campaigns and authorize civil actions for damages arising from unfair competition.

Greenwashing – i.e., the dissemination of misleading or unverifiable environmental claims – is regarded as an unfair commercial practice. EU Directive 2024/825 strengthens the existing framework by prohibiting generic claims that are not supported by evidence, regulating the use of sustainability labels, and introducing the requirement of recognized certifications. Member States must transpose the Directive by March 27, 2026, with full application from September 27, 2026.

Two recent AGCM cases illustrate the practical consequences of misleading ESG communication in the fashion industry. In the ARMANI case (decision PS12793, August 1, 2025), the Authority imposed a fine of €3.5 million on Giorgio Armani S.p.A. and G.A. Operations S.p.A. for disseminating misleading statements concerning respect for workers’ rights in the leather goods supply chain. The investigation revealed the removal of safety devices from machinery, unsanitary working environments, and the use of irregular labor—demonstrating a clear discrepancy between the values declared and the practices implemented. In the SHEIN case (decision PS12709, August 4, 2025), the AGCM fined Infinite Styles Services Co. Ltd. €1 million for vague and unverifiable green claims relating to the evoluSHEIN by Design line and emissions-reduction pledges. The Authority emphasized the enhanced duty of care incumbent upon fast fashion operators, given the significant environmental and social footprint of the sector. In both cases, the AGCM applied Article 21 of the Consumer Code and Directive 2005/29/EC, reaffirming that ESG communications must be based on verifiable evidence and recognized certifications.

Violations give rise to multiple consequences: monetary sanctions, civil actions for unfair competition and reputational damages, precautionary measures, IAP censure, revocation of ESG certifications, potential consumer class actions, and even administrative or criminal liability for fraudulent statements. Beyond advertising and competition law, misleading green claims may also infringe industrial property rights—such as trademarks, designs, and patents—thus constituting violations under the Italian Industrial Property Code (Legislative Decree No. 30/2005) and unfair competition under Article 2598 of the Italian Civil Code. Misleading ESG statements may generate undue advantages over competitors who genuinely comply with ESG standards, thereby damaging the reputation and IP rights of virtuous brands.

Fashion companies must therefore develop clear, transparent, and verifiable commercial communications, in full compliance with Italian and EU regulations and consistent with ESG principles. The AGCM’s measures against Armani and SHEIN (which remain subject to appeal before the Regional Administrative Court) demonstrate that sustainability cannot be reduced to a mere marketing tool, but must be reflected in concrete, correctly communicated commitments. Only in this way is it possible to safeguard brand reputation, ensure fair competition, and mitigate legal risks in advertising and industrial property.