The Ethical Consumer and Codes of Ethics in the Fashion Industry

Abstract

Sustainability is a central challenge of the fashion industry. In an era where Internet and social networks allow information to spread quickly, more consumers are familiar with the call for “ethical fashion” as disasters such as Rana Plaza resound worldwide. However, consumers interested in buying “ethical” clothing could have a hard time orienting themselves amongst the abundance of brands claiming to be ethical on the market. Consumers might make purchasing decisions based on their knowledge of a brand. In this context, it is imaginable that corporate social responsibility (CSR) communications, including codes of ethics, could constitute one way a consumer can learn more about a company’s values. These codes may serve a variety of purposes—they are undoubtedly one of the ways a brand communicates its commitment to ethical principles. Indeed, by analyzing the codes of ethics of some of the industry’s well-known brands, it is evident that they primarily focus on employment and workers’ rights (including equality and discrimination issues), labor safety standards, bribery and anti-corruption, counterfeiting and unfair business practices, as well as respect for (and sometimes improvement of) the environment. A company’s code of ethics is also a powerful tool for improving brand image by adopting a code that responds to the issues that consumers care about. It is therefore necessary to distinguish between companies that are truly ethical and those that merely appear so. In order to protect consumer confidence in such documents, a fil rouge across legal systems may be found (although the specific characteristics may vary greatly) in the laws that protect consumers from misleading advertising.

1. Introduction

Until just a few years ago, the neologism “fashion victims” (Treccani 2012) indicated who obsessively followed fashion and new trends, a product of the eighties and the explosion of the brand cult. Today, this same term brings to mind exploited workers (Zinola 2019) from countries such as China, South Korea, Indonesia, Malaysia, India, and Bangladesh (Kristof and WuDunn 2000).1 Peoples’ memories are imprinted with media images of the 24 April 2013 collapse of the Rana Plaza, the immense building where cheap apparel was produced for the Western world, resulting in the deaths of more than a thousand people (Taplin 2014).2 News of this disaster resounded all over the world, awakening the consciences of those who had not yet become interested in sustainable fashion.3 It is therefore not surprising that the “Top 10 consumer trends” of 2019 (Angus and Westbrook 2019) lists the “conscious consumer” that wants “to make positive decisions about what they buy and look for a solution to the negative impact consumerism is having on the world” as one of top modern vogues. Such consumers—those who worry about how their purchasing decisions impact the world in general; those that might be defined as “ethical consumers” (Harrison et al. 2005)—could have a difficult time orienting themselves amongst the abundance of brands claiming to be committed to the same principles on the clothing market.

One of the ways an ethical consumer can learn how aligned a brand is with the issues and/or values they care most about is by visiting a company’s website. Here, in addition to marketing its products, company websites tend to contain information about a company’s core values and the ethical principles by which it abides. For instance, information on compliance with corporate social responsibility (CSR) principles is often published, and many fashion brands have links4 to their corporate code of ethics or code of conduct5, which are a sort of company “constitution” (Nieweler 2014).

In this context, a company’s code of ethics could become an important tool that allows the consumer to discover and learn more about a brand’s policies. Learning that a company has established a self-regulatory instrument to ensure adherence with principles of ethical business practice may affect the choices of ethical consumers who share the same principles and are concerned about the same issues that are reflected in the brand’s code of ethics.

Thus, this article highlights some consumer sensibilities regarding a more sustainable fashion industry, aiming to offer insight on the development of the use of codes of ethics in general, and in the fashion industry in particular, especially in relation to the protection of the right to safe and healthy working conditions, as working conditions are indeed amongst the issues that ethical consumers care most about. However, given that companies may use such topics to increase sales (Binet et al. 2019), the public must take care that these are not mere words—that CSR does not translate into a façade: in the event of the latter case, an insincere CSR program might even become a barrier to finding real solutions (House of Commons 2019, p. 14). Accordingly, this article concludes by hypothesizing whether it is possible to protect consumer confidence in these codes by identifying a fil rouge across legal systems (notwithstanding any variability in the specific characteristics of national legislation) in the laws that protect consumers from misleading advertising.

2. Consumers’ Concerns

Sustainability is a central challenge of the fashion industry. If securing a sustainable future for the planet and humankind is one of the defining challenges of our time (House of Commons 2019), then it is not surprising that non-governmental organizations (NGOs), international organizations, institutional actors, and public opinion are pushing the fashion industry in this direction. The fashion industry has been recognized as one of the most polluting (Brenot et al. 2019; Cherny-Scanlon and Agnes 2016; Conca 2015; Fletcher 2014; Jucker 2011; Kant 2012; Kuik 2004–2005; Muthu 2014; Raluca 2019; Shih and Agrafiotis 2017; Slater 2003), even if it appears that the “green fashion” movement developed simultaneously with the largest environmentalist movements of the 1960s (Gordon and Hill 2015). Furthermore, although the recent campaigns of activist groups—such as Green Peace, which has been fighting for a sustainable fashion supply chain since 2011 (Greenpeace International 2019)—indicate there remains much to be done, one of the positive effects of the many campaigns and initiatives for sustainable fashion is the consumer response (or at least a growing number of consumers) (Gordon and Hill 2015) to the well-known slogan, “Join the Fashion Revolution. Be part of the global movement calling for a fairer, safer, cleaner, more transparent fashion industry” (Fashion Revolution 2019).

Moreover, the sweatshop problem is certainly not new to the general public.6 For example, back in the 1990s, there were reports of corporate giants (such as Nike) relocating production to lower costs and benefit from less stringent legislation: public opinion denounced these brand-names and held them accountable for the working conditions in the factories of their supply chain (ex multis, Featherstone 2002; Harrison and Scorse 2010).

Today, in an era where Internet and social networks allow information to spread far and wide almost instantaneously, more consumers are familiar with disasters such as Rana Plaza. Even if it was not the first time the fashion industry had been associated with catastrophe,7 its severity and its media exposure has compelled people to ask themselves: “who made my clothes?”8.

Indeed, the general public is aware of the “True Cost”9 of the fashion supply chain—especially when it comes to fast fashion.10

Those who might be characterized as ethical consumers are sensitive to specific issues and share a general sentiment that they want the workers who produced their clothes to be protected (meaning, for instance, they should have an employment contract with set maximum work hours, be paid at least minimum wage, and work under safe conditions); they want the entire production chain oriented toward minimizing environmental impact and its carbon footprint; and they want to protect animals, preferring cruelty-free products. On this last point, even though one might recall the anti-fur campaigns of the 1980s and 1990s popular culture, it was only recently that brands such as Gucci, Michael Kors, and Giorgio Armani joined the Fur Free Alliance (Fur Free Alliance 2019) and banned the use of any type of fur in their collections.11 Furthermore, it was only a few months ago that Chanel stopped using furs and exotic leathers (Kolirin 2018).

The number of “ethical consumers” who view ethical fashion favorably seems to be increasing,12 but it is difficult to decipher how this attitude translates into purchasing behavior, and especially whether consumers will spend more for an ethical product.13 Yet it is still very difficult to answer the question, “To what extent do consumers favor the products of socially responsible firms or shun those produced irresponsibly?” because the results are not unique (Vogel 2005, p. 47).

Despite the forms of consumer communication and marketing strategies in this regard being very heterogeneous, many current contenders in the fashion industry portray themselves as committed to “ethical business”. Indeed, some distinguish themselves by incorporating environmental aspects into their business model. In this sense, being environmentally friendly becomes a new concept of quality. Take Patagonia or The North Face, for example. Other brands might orient their competitive advantage around animal friendliness and promoting animal rights,14 and so on.

All this has resulted in a significant number of initiatives by many brands calling for improved sustainability and more ethical practices.15 However, the overwhelming number of such endeavors—in addition to the lack of real transparency—makes it difficult for consumers who are interested in buying ethical clothing to make well-informed decisions (Pookulangara and Shephard 2013, p. 204).16

In the recent past, and in order to feel confident that one’s clothes were not produced in sweatshops, consumers, in an approximate and generic manner, looked at the country of production.

Today, this end may be achieved in various ways, for instance, by reading the label on the inside of the clothing of those brands that participate in such movements. Indeed, other than containing details such as raw material composition and the product’s country of origin, labeling could be useful to communicate information related to the environment, working conditions, and much more.17 Labels pertaining to social conditions in manufacturing have a long history (Kuik 2004–2005), but in the last few years brands have become increasingly interested in obtaining various types of certifications attesting that their products are “green”, “ethical”, or “animal cruelty free”. Environmental certifications might guarantee that only those chemical substances not harmful to the environment were used to manufacture garments—whether during plant cultivation (such as cotton), spinning of fabric, or any subsequent processes involved in production. Social (or ethical) certifications set, for instance, minimum standards of respect for workers’ rights (Koszewska 2011), and there are also certifications that specifically guarantee respect for animal welfare, certifying that the brand in question does not use materials coming from animals.

Labels containing reliable information on sustainability certainly provide fairly immediate and useful information, but clothing tags and certification labels are neither widely used nor well known and may even be difficult to navigate.

One’s “knowledge” of a certain brand constitutes another important tool that an ethical consumer might avail of when making purchasing decisions. Whether one “knows” a brand depends on a variety of factors, but reading a company’s statements, including its code of ethics, could be one of them. Furthermore, it is also an easy way to learn more about a company’s values. What is more, although these codes are undoubtedly one of the ways a brand communicates its commitment to ethical principles, they may serve a variety of purposes. For instance, it appears that some demands for sustainable fashion are reflected in the language and structure of the codes of ethics of individual fashion brands, such as in relation to employment and workers’ rights (including equality and discrimination issues), labor safety standards, bribery and anti-corruption, counterfeiting and unfair business practices, as well as respect for (and sometimes improvement of) the environment. This is not surprising given the history of the development of code of ethics, their functions, and the ethical consumers’ concerns.

3. The Emergence and Development of Codes of Ethics

Although the underlying fundamental principles of corporate codes of ethics are not novel (Baker 1992), codes of ethics have a relatively short history (Benson 1989; Pitt and Gross-Kaufmanis 1990)—starting in the United States. Indeed, episodes of gross corporate misconduct in the 20th century induced companies to adopt methods to avoid (or at least reduce) unethical business practices (Benatti 2014; Messikomer and Cirka 2010).18

The importance of self-regulation became apparent during the Great Depression, when businesses and lawmakers alike began taking steps to avoid another crisis similar to the one experienced after the 1929 stock market crash.19 However, due to the practical difficulties in regulating many heterogeneous industries, the first legislative interventions were scarcely effective. Indeed, it took nearly 30 years for companies to assimilate the regulatory push-and-pull. The first scandal that prompted companies to rethink the way they did business20 occurred in the early 1960s and concerned the electric industry, wherein numerous antitrust law violations resulted in hefty fines and the incarceration of various managers.21 In response to public backlash and the perception that the same freedom of enterprise that had contributed to the nation’s economic prosperity no longer supported social values, the 1970s saw the first drafts of modern codes of ethics. As the 1970s progressed, it became evident that companies alone were inept at creating effective guidelines for corporate behavior and U.S. Congress stepped in, enacting the Foreign Corrupt Practices Control Act (FCPA) that required public companies to establish detailed internal control procedures. While some prudent companies went farther by adopting a code of ethics, as such adoption was not required, for the most part, business continued as usual (Benatti 2014).

Notwithstanding the presence of corporate internal control procedures, scandals during the 1980s22 suggested that the era’s safeguards were inefficient and, in 1988, U.S. Congress enacted the Insider Trading and Securities Fraud Enforcement Act. Although the Act essentially obliged companies operating in certain fields to adopt codes of ethics,23 what is interesting is how developments and negative public opinion about unethical practices caused more and more businesses to establish some form of self-regulation until, by the end of the 1980s, approximately 90% of companies had a code of ethics in place. Indeed, the 1980s has been named “The Age of Ethics” precisely because of this movement (Benatti 2014).

Still, the 1990s and early 2000s were not without their scandals. Measures such as the Federal Sentencing Guidelines in 1991 and the Sarbanes Oxley Act of 2002 made it increasingly difficult for Corporate America to formally maintain the status quo.24 Furthermore, as society became more critical, business reacted, not just with codes of ethics, but also with efforts such as CSR programs and ad hoc initiatives to boost revenues and improve corporate image (Benatti 2014).25

Thus, as big business sought to strike a balance between self-regulation and increasingly stringent legal requirements, it appears a trend was established. Currently, companies trading on the New York Stock Exchange must adopt a code of ethics that regulates specific issues and provides certain control procedures (Benatti 2014). Further, the recognition by more and more countries that companies can be criminally liable for organizational failures and misconduct of their agents (Heine and Grabovets 2016) has caused many small and medium enterprises (SMEs) and multi-national enterprises (MNEs) alike to implement an organizational structure analogous to a formal code of ethics.26

In this context, it appears that the corporate scandals that plagued the 1960s, ‘70s ‘80s, ‘90s and 2000s have contributed to the development of a global culture—both corporate and societal—that is more aware of (and sensitive to) business practices in conflict with today’s socio-economic principles and standards. Furthermore, as the reach of this culture expands, the adoption of codes of ethics as a so-called institution has circulated from America throughout common law countries27 to reach Europe, and even Asia and Africa.28 Much of the relative success of the spread of codes of ethics may be attributed to the efforts of international organizations, which not only support and encourage companies to respect internationally recognized standards of conduct, but aid their spread into developing countries.29 Understanding the development of codes of ethics is a prerequisite to a better understanding of their purposes.

4. The Purposes of Codes of Ethics

According to one source, codes of ethics function as a sort of company “constitution” (Nieweler 2014); they are a form of self-regulation that normally contain general principles to guide behavior (e.g., that the company is committed to providing safe working conditions, that it does not use child labor, and that it undertakes to protect the environment). Unlike codes of conduct, codes of ethics traditionally do not outline specific behaviors required or prohibited as a condition of employment or provide practical details to ensure compliance with other codes or guidelines in force within a corporate structure. At the same time, events such as those mentioned in the preceding paragraphs have encouraged some companies to make their codes of ethics more detailed. Simply put, a growing number of companies do not limit themselves to merely establishing the guiding principles of behavior, but actually “spell out” how such principles must be respected,30 and may even “link” their codes of ethics to other internal resources and/or guidelines, such as employee handbooks (or behavioral codes of conduct).

Therefore, as far as their purpose is concerned, codes of ethics are multifunctional. From a structural point of view, codes of ethics represent (and enhance) a company’s culture and values. From an organizational perspective, they may cause a company to establish a specific department dedicated to corporate social responsibility, for example, or compliance and/or monitoring. Depending on how a code of ethics is implemented, it might affect operational costs31 or support codes of conduct applicable to a company’s directors. When it comes to human resources, codes of ethics may be instrumental in attracting certain talent or employees with particular traits. In the fashion industry, one of the uses that gives significant (corporate) value to codes of ethics lies in their use to portray messages about a certain brand to the public.

As such, an analysis of the codes of ethics of some of the industry’s top brands is warranted to better understand how such codes could become a tool to convey some of the brand’s values.32 This method was chosen because, if it is generally true that companies respond to market demands, and new generations of consumers “want brands to step up on sustainable lifestyles” (Townsend 2018), then—from the moment a significant percentage of consumers demand ethical business practices—the adoption of increasingly specific codes of ethics is a corporate response to a more ethics-conscious consumer. Thus, if the adoption of codes of ethics represents one of the ways ethical (or at least “ethics-conscious”) consumers may better gather information about the fashion industry,33 then the structure, language used, and attention given to each issue within each single company code of ethics provides insight into the primary concerns of fashion producers.

5. An Insight on Codes of Ethics in the Fashion Industry

In response to various industry-wide issues, one of the reasons fashion brands have adopted codes of ethics is to address problems ranging from inadequate labor standards to corruption and bribery to environmental protection. Consequently, it is advisable to review the codes of some of the industry’s trendsetters34 in order to identify some of the issues that might be perceived as challenges.35 In other words, by studying the structure, language, and attention given to each issue within the ethical codes of a sample of market leaders, it has been possible to determine the key issues of the global fashion industry.36

For example, most of the companies surveyed explicitly stated their codes of ethics are legally binding for all employees, collaborators, and suppliers (the “addressees”), no matter their position, type of employment contract, or role within the company.37 Some firms have expressly linked their codes of ethics to the primary supplier–buyer agreement,38 which remedies the code’s enforceability problem connected with its clearly “accessory” (or collateral) nature. In this way, a violation constitutes a breach of the main contract (for services or procurement of goods), meaning suppliers are more likely to behave ethically due to the real threat of termination for breach. Other fashion companies might have different “versions”39 of codes of ethics40 (one aimed at the company as a whole, and one specifically for suppliers), or a single code with multiple sections for specific addressees.41 This setup illustrates a top-down organizational structure, as the company managers (who make the decisions and give orders to the suppliers) must be ethical, while the producers receive more detailed instructions on how to behave within the organization, and must execute behaviors in line with principles that—due to various cultural contexts—may or may not be shared.

From a legal perspective, in so much as a code of ethics constitutes a sort of contract—whether because the code itself establishes it is directly binding or because it is an accessory to another agreement (between a company and its addressees)—codes of ethics tend to oblige third parties to adhere to the buyer’s principles. This has two practical effects: first, it means the buyer assumes a greater risk for third party behavior and, where codes are sufficiently detailed, increases the chances the buyer will effectively terminate the business relationship in case of breach. Thus, by enforcing a code of ethics that establishes rules of conduct to support the principles upon which the code is based, companies with more detailed codes are more likely to contribute to an increasingly sustainable industry.42 Second, it effectively results in a sort of “exportation” of laws from developed countries into the developing world. Indeed, all codes state that addressees must abide by all applicable national and international law. However, since this ultimately would result in merely promoting suppliers to comply with national law (since international laws only apply in rare circumstances), all codes are additionally integrated by some wording to the effect of “and internationally recognized standards.” For American and European buyers, this language means that American/European employees, collaborators, and suppliers are subject to American and European law, while non-US/EU producers must primarily respect principles. Legally, the requirement to respect different legal sources is significant.

The difference between legal principles and legal rules is a logical distinction. Both sets of standards point to particular decisions about legal obligation in particular circumstances, but they differ in the character of the direction they give. Rules are applicable in all-or-nothing fashion. If the facts a rule stipulates are given, then either the rule is valid, in which case the answer it supplies must be accepted, or it is not, in which case it contributes nothing to the decision … If two rules conflict, one of them cannot be a valid rule … When principles intersect … one who must resolve the conflict has to take into account the relative weight of each.

(Dworkin 1967, pp. 25–27)

In other words, there are explicit penalties for failing to comply with American and/or European law: depending on the applicable law, there may be civil and/or criminal consequences for the company, as well as its managers (depending on the infringement). The American and European legal systems also provide detailed requirements, procedures, and minimum standards, as well as confer specific powers to courts in various jurisdictions to ensure such laws are respected. On the other hand, principles function as values upon which to base one’s behavior, but they do not prescribe conduct in any meaningful terms, nor are they easily enforceable. Indeed, the effective structure of the supply chain, combined with the laws on jurisdiction, makes the execution and enforcement of principles complicated. Further, socio-cultural differences may hinder them from fully resonating in far off, non US/European countries: “[m]ost educated people have the idea that the laws in England form some sort of system, and that … in almost every part of the world which is thought of as a separate ‘country’ there are legal systems which are broadly similar in structure in spite of important differences” (Hart 1961, pp. 2–3). Therefore, by requiring non-US/EU suppliers to comply with principles—rather than writing its own set of laws, for example by way of contract, fashion companies effectively allow their suppliers to continue “work as usual” without significantly raising the bar.43

At least half of the codes analyzed provide that, in cases where there is either no local law governing a topic, or there is more than one applicable law, the law with the most stringent standards applies,44 but not all companies agree on which law or standard should be applied in business.45 Furthermore, while some codes go so far as to list specific applicable laws, conventions, or standards, those codes that remain more general use language that reflects the principles contained in relevant internationally recognized documents.

There are also companies that do not limit themselves to creating principles for addressees to follow. Rather their codes “[express values of ethical integrity] and [establish] the principles and rules of conduct deriving from them” (Prada 2007, p. 2).46 For instance, all companies surveyed promote principles such as loyalty, honesty and good faith, correctness, and integrity. Some companies go further by mandating that relations between employees, no matter their level, including between them and the third parties with whom they come into contact during the course of their work, “be marked by criteria of collaboration, loyalty, and reciprocal respect” (Prada 2007, p. 4), that criteria of merit be adopted in order to valorize employees’ skills and competencies, and that equal opportunities are guaranteed to all. By doing so, the code takes on a truly contractual nature—especially from a civil law perspective—as the object (or subject matter) of the “contract” is increasingly determinable. In line with the International Labor Organization (ILO) principles (adopted by every code of ethics surveyed), child and forced labor is prohibited across the board. However, the same companies that do not limit themselves to merely declaring principles by which to abide additionally require their “suppliers [to] implement a management system that verifies the age of each employee by review of legally accepted documentation”(Armani 2017, p. 1)47 and directly address the issue of abuse of apprenticeship/traineeship schemes to avoid the payment of wages or benefits.48 Moreover, some fashion brands oblige their suppliers to implement a written disciplinary procedure (Armani 2017, p. 2; Ralph Lauren 2016, p. 1). Legally, this (at least theoretically) reduces the likelihood of groundless disciplinary action and gives employees a basis for any recourse in the event of wrongful dismissal or other illegitimate corrective/punitive measures. It is additionally significant that in order to combat undeclared or illegal work, the majority of codes of ethics surveyed require (monthly) pay slips to be issued each pay period. As regards standards of pay (in line with expressed ethical principles based on ILO conventions), overtime is always contractually paid at a higher rate than normal pay.49

With regard to work hours, maximum work hours may vary but do not exceed 60 h per week, including overtime, and establish at least one day of rest. What is more, all companies recognize workers’ rights to refuse overtime, and some expressly recognize workers’ rights to “be informed about overtime in advance and permitted to reject the overtime request without punishment or retaliation” (Armani 2017, p. 2). Along these lines, companies with more detailed codes tend to require their suppliers provide workers with a written copy of their employment contract, and that such contract must be in a language the worker understands. Not only do these provisions illustrate the influence of the company’s home (western) culture on its business practices—in that western fashion brands, albeit in a limited fashion, export national labor law abroad—but they provide employees with greater legal security.50 It is also interesting that—in addition to requiring suppliers provide workers with safe and healthy working/living environments—some companies list conditions that make such environments “safe and healthy”51 or provide practical sections with “questions and examples to help apply the code” (Gucci 2016, p. 14; see also Gap 2012).

Moreover, due to the difficulty of monitoring compliance, the majority of codes appear aimed at compelling suppliers to implement a management system similar to that required by Italian Legislative Decree No. 231/2001 (with a relative grievance system), with specific personnel responsible for the management and implementation of the supplier social code, including informing all workers and subcontractors of all applicable legislation and any changes to such. Part of this system includes ensuring the maximum dissemination of the code of ethics and educating addressees of its contents. Other codes, in addition to the above, provide anonymous reporting channels and identify a specific competent authority (such as the company’s legal department) to field complaints. Therefore, given the similarities between certain codes of ethics and supplier codes of conduct, it appears many fashion brands seek to apply US/European law abroad through their contractual relationships with suppliers and subcontractors. In this respect, it appears that a company’s code of ethics has the potential to become a sort of “living document” where the addressees are not only responsible for its implementation, but also have a (at least partial) voice in the mechanisms adopted to achieve the company’s goals. To use some legal terminology, these types of codes of ethics resemble a sort of “framework agreement” whereby, subsequent to feedback from the bottom up, top managers may decide to amend prescribed conduct and/or procedures from time to time in order to better reflect and ensure compliance with the overarching (ethical) principles established by the code.

Simply put, notwithstanding internal documents are not available for analysis, it appears that the more detailed the code of ethics, the less likely a company’s principles will be violated for profit.

A company’s code of ethics is a powerful tool in that a brand may improve its image by adopting a code that responds to the issues that consumers care about. It is therefore necessary to distinguish between companies that are truly ethical and those who merely appear so.

6. Conclusions

The above paragraphs outline the emergence and development of codes of ethics, their purpose, and some insights into their content. It has been said that codes of ethics are a form of self-regulation that contain general principles to guide behavior and that those codes are multifunctional, as they not only serve to represent (and enhance) a company’s culture and values, but also may cause a company to adopt a specific organizational and/or governance structure. Some fundamental themes relate to workers’ rights (including equality and discrimination issues), labor safety standards, bribery and anti-corruption, and counterfeiting and unfair business practices, with limited direct attention given to environmental protection.52

Attention to working conditions is not surprising. As previously stated, large retailers have outsourced production to countries with low wages, poor to no union representation, and lenient (or non-existent) environmental protection, where textile workers are accustomed to poverty and child-forced and prison labor is reported (ex multis, House of Commons 2019, p. 12 ff). Today, these and similar issues are well known and stigmatized by public opinion around the world. In an era where Internet and social networks allow information to spread quickly, a greater number of consumers have taken interest in the challenges of ethical and the sustainable fashion cause.53 Consequently, when shopping for apparel, consumers have different concerns; the general labor conditions under which their clothing is made is one of them. Yet, when one is interested in purchasing an ethical garment, it is difficult to navigate among the many choices on the market (Vogel 2010).

Irrespective of whether CSR programs succeed in tackling problems such as poor working conditions and low wages in the clothing sector,54 they may nonetheless create a general sense of reliance and may even influence consumer choice. Codes of ethics may affect how a certain brand image is portrayed to the public: as these codes are easily accessible on the brand’s website; consumers might perceive them as a tool to gain better knowledge of company’s values and consequently rely upon them.

Indeed, such codes can be used as marketing tools to attract more ethical fashion consumers precisely because they speak to issues the public finds important, such as workers’ rights. They could be used as a commercial statement even if they do not take the form of “classic advertising”.55 It is therefore necessary to distinguish between those companies that genuinely want to be “ethical” and those that merely aim to appear as such—without effectively being such—in the eyes of consumers. For instance, it is not news that some companies are stigmatized for practicing “greenwashing”56 (i.e., the act of misleading consumers with regards to practices that impact the environment).57 Analogous practices could be used in other fields, such as child labor and, more generally, working conditions.58

These reflections lead us to question what might happen if, for example, a consumer discovered (perhaps from a journalistic investigation) that the apparel purchased (from a brand claiming, expressly in its code of ethics, to be ethical and sustainable) was not produced in the specific way declared?59 For instance, we could imagine what might happen if a brand violated its pledge not to use child or forced labor in the production of its clothes—a commitment made by every code of ethics surveyed.

If it is conceivable that consumers might reach out to some NGO and carry out or contribute to a protest campaign, as the strategy of “naming and shaming” has often been effective. Such action might even result in a boycott of famous brands: damage to image and reputation might be significant. Indeed, in the case of a lesser-known company, such a violation could be more difficult to discover, or might attract less public attention. However, for an ethical consumer, buying ethically produced apparel means buying a product that possesses certain “qualities”, which form the precise basis for purchasing that (ethical) brand over another (un-, or less-ethical) brand. What legal remedy might a customer have upon discovery that a company’s code of ethics, which were instrumental in the purchase decision, was nothing more than lip service to the issues that consumers value?

Consumers have different concerns when they purchase clothing, and concerns about the conditions under which they are made should have the same protection than concerns about price or other characteristics (Chemerinsky and Fisk 2004).

If we wish to look specifically for a fil rouge across legal systems, and not focus on the various national de jure conditio and de jure condendo approaches,60 we might find common threads (despite particular details that might vary greatly between them61) in the laws that protect consumers from misleading advertising: all developed countries have laws aimed at helping consumers make better informed decisions based on accurate information in order to guarantee efficient market transactions (Nehf 2010, p. 107).

Generally speaking, if a brand fails to comply with a specific, clear, and verifiable undertaking (and therefore not including too general, idealistic, or aspirational statements) set out in its code of ethics, and those same representations caused a consumer to make a commercial decision that—without such affirmations—s/he would not have otherwise made, then it might not be audacious to place this case within the framework of the laws against misleading advertising and/or unfair commercial practices (Benatti 2014, p. 203; Bussoli 2010, p. 167; Chiari 2017).

This view is not dissimilar to that put forth in 2003 in the United States in a case62 against Nike. Although this case was not strictly related to a code of ethics, it nonetheless offers points for reflection. Specifically, in 1996, Nike responded to allegations of mistreatment and exploitation of workers at overseas facilities63 by (amongst others) publishing press releases and writing letters to the editors of various newspapers around the country. However, in April 1998, Marc Kasky sued Nike in California for unfair and deceptive practices, claiming Nike had violated California’s Unfair Competition Law and False Advertising Law64 by making “false statements and/or material omissions of fact” about the working environments where its products are manufactured “in order to maintain and/or increase its sales.” Although the lower courts ruled in favor of Nike (holding it had exercised “noncommercial speech” protected by the First Amendment), it is interesting to note that the California Supreme Court reversed the decision of the lower court (holding that “[b]ecause the messages in question were directed by a commercial speaker to a commercial audience, and because they made representations of fact about the speaker’s own business operations for the purpose of promoting sales of its products, … [the] messages are commercial speech”), but remanded for further proceedings on the grounds that the suit “is still at a preliminary stage.” Following this decision, Nike appealed (petitioned for certiorari) to the US Supreme Court (USSC), which initially agreed to hear the appeal65 but ultimately, in 2003, let stand the California Supreme Court’s ruling by dismissing the writ of certiorari as improvidently granted. Despite Nike and Kasky eventually settling (costing Nike $1.5 million) (Bigge 2004) the case before any solid precedent could be established, it is nonetheless significant to note that—in light of the uproar surrounding supply chain issues—the state of California has recently enacted the CA Transparency in Supply Chains Act that requires all retainer sellers and manufacturers doing business in California with global gross receipts of at least $100,000,000 to disclose the extent of their efforts in the areas of verification, audits, certification, internal accountability, and training.66 Thus, as far as North America is concerned, it appears legislation is shifting in the direction of holding big business accountable to the public by requiring increased transparency when it comes to production and sourcing of products.

Similarly, on the other side of the ocean, the European Unfair Commercial Practices Directive67—enacted in 2005 “to contribute to the proper functioning of the internal market and achieve a high level of consumer protection by approximating the laws, regulations and administrative provisions of the Member States on unfair commercial practices harming consumers’ economic interests” (Art. 1, Directive 2005/29)—suggests that lawmakers might also be moving in this direction.68 In addition to its broad Art. 6(1), Art. 6(2)(b) expressly prescribes that “a commercial practice shall also be regarded as misleading if … it causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise, and it involves: … (b) non-compliance by the trader with commitments contained in codes of conduct by which the trader has undertaken to be bound, where: (i) the commitment is not aspirational but is firm and is capable of being verified, and (ii) the trader indicates in a commercial practice that he is bound by the code.”69

Likewise, Australian Consumer Law70 also aims to protect consumers and ensure fair trading by prohibiting, in its Section 18(1),71 a person from engaging in conduct in trade or commerce that is misleading and deceptive or likely to mislead or deceive. This broad prohibition could be construed to create a general standard of conduct that would encompass aspects of CSR programs, such as codes of ethics (Southalan 2008; Spencer 2003).

Codes of ethics are often seen as a “win–win” solution (Howells et al. 2006, p. 196) and may perform a variety of functions, including being used as a marketing tool to meet the growing concern of consumers that clothing complies with ethical standards. In this regard, the laws against misleading advertising should provide protection in cases where codes of ethics have been used deceptively to affect or distort a consumer’s choice, or significantly impair one’s ability to make an informed decision. Albeit such path is narrow—indeed, to date, there does not appear to be any relevant evidence of courts (neither US, nor Australian) having found for a plaintiff relying on Kasky’s line of reasoning, and the European UCPL requirements are quite strict72—it is still one worth pursuing.