May 5, 2022

Major department store chains pay millions of dollars to settle greenwashing claims

The US Department of Justice and the Federal Trade Commission announced on May 5, 2022 that two major department store chains, Kohl’s Inc. and Walmart Inc. had agreed to pay civil penalties of $2.5 million and $3 million, respectively, to settle allegations that they violated the Federal Trade Commission Act and the Textile Fiber Products Identification Act and associated rules. 

The settlement documents reveal that Kohl’s used phrases such as “made with sustainable bamboo,” and “Cleaner Solutions” and “Made in Green” on towels, sheets and bedding materials  to show that they were made “free of harmful chemicals, using clean, non-toxic materials,” would be “gentle on the planet,” and that “highly renewable bamboo blend promises environmentally friendly use.”   Similarly, Walmart advertised sheets, towels and blankets as “100% bamboo,” “eco-friendly & sustainable,” and “renewable and environmentally sustainable.” 

Some of the items thus marketed contained no bamboo fiber at all, but were made of cotton and rayon.  Rayon is made of purified cellulose from plants (including occasionally bamboo), processed with harmful chemicals and solidified into fibers that are no longer cotton, wood or bamboo fiber.  In addition to using hazardous chemicals in the manufacturing process, rayon production emits hazardous air pollutants such as carbon disulfide, carbonyl sulfide, ethylene oxide, methanol, methyl chloride, propylene oxide, and toluene. 

Both Kohl’s and Walmart were warned by the Federal Trade Commission in 2010 that their textile advertising and labeling practices might violate the FTC and Textile Acts, and on several occasions since then the FTC has publicly announced settlements with large national marketers that received warning letters about use of the word “bamboo” in product labeling and advertising. 

In its order and stipulation, the US District Court for the District of Columbia noted that a violation of the Textile Act or associated Textile Rules constitutes an unfair or deceptive act or practice in violation of the FTC Act.  Both Kohl’s and Walmart were found to have violated Section 5(a) of the FTC Act, 15 USC § 45(a), which prohibits “unfair or deceptive acts or practices in or affecting commerce.”  The stipulated orders permanently enjoin the companies from making misleading claims about their textile products, and from committing further violations of the Textile Act and Textile Rules, in addition to imposing the civil penalties described above. 

United States prosecutors thereby made use of existing legislation to impose millions of dollars of penalties for greenwashing, after warning companies and the public that it intended to do so.

DOJ press release | Order and Stipulation (Kohl’s) | Order and Stipulation (Walmart)