New EU Legislations: Is Litigation Destined To Be The New Trend in 2025?

I recently stumbled across a case involving ExxonMobil that left me reflecting on how high-stakes accusations—like claims of "false promises" or "misleading practices"—can snowball into extensive legal battles. And while the world of oil and the world of fashion might seem light-years apart, the parallels, were for me, quite striking.

So, this got me thinking: as the European Union (EU) prepares to roll out strict sustainability and transparency regulations, could the fashion industry be next in line for a constant wave of legal disputes?Yes, there have already been instances, such as the Lululemon lawsuit last year (2024), where the company faced allegations of misleading consumers about its environmental commitments. However, I believe these cases are just the beginning, and accountability is poised to become one of the 4 horsemen driving a dramatic reckoning in the fashion industry— the other three are undoubtedly sustainability, transparency and human rights.

So with increased scrutiny, under the watchful for eye of the law, comes the risk of accusations—whether it’s for failing to comply with the rules or being accused of greenwashing. Will 2025 be the year that even more fashion brands would find themselves embroiled in courtroom drama, much like ExxonMobil? Let’s dive in to explore his new legal landscape and what it could mean for brands, big and small.

The Impact of EU Sustainability Legislations

EU's proposed and enacted laws, such as the Corporate Sustainability Reporting Directive (CSRD) and the Green Claims Directive, demand greater transparency from companies, including fashion brands. These laws push for detailed reporting on environmental and social impacts, proof of sustainability claims, and strict penalties for non-compliance.

For an industry historically criticised for greenwashing, these laws could trigger:

• A Rise in Greenwashing Allegations: Just as ExxonMobil faces accusations of misrepresentation, fashion brands may be accused of exaggerating their sustainability credentials. Misleading advertising or unverified claims could lead competitors or regulators to initiate legal actions.
• Heightened Scrutiny from NGOs and Activists: Non-profit organizations may pursue litigation against brands for perceived environmental damage or misleading marketing. This mirrors the role of activist groups in the ExxonMobil case, where public sentiment and advocacy align to push for corporate accountability.
• Increased Litigation Among Competitors: Fashion brands might accuse rivals of not complying with regulations or of unfair practices, much like the competitive dynamics seen in the ExxonMobil lawsuit.

Will A Rise in Compliance-Driven Litigation Become a Thing?

It is no secret that the European Union (EU) has started on the long road of implementing stringent regulations for the fashion industry, and I predict that fashion brands might soon find themselves in a courtroom —either as a battleground to defend their sustainability efforts or as a stage for challenging competitors over perceived misconduct.

For me, the ExxonMobil case revealed how accusations of greenwashing can quickly tarnish a brand's reputation. It certainly presents a cautionary tale for the industry that raises the questions: How can companies effectively defend themselves while staying focused on sustainability goals? The answer lies in proactive compliance and transparent communication with stakeholders.

For instance, a fast-fashion retailer claiming to use “100% recycled materials” may face scrutiny from competitors if it cannot provide transparent, verifiable supply chain data. Advanced technologies like blockchain could help mitigate these risks by ensuring traceability, but smaller brands may struggle with the associated costs.

As David Ford, a compliance consultant, points out: “The EU’s focus on transparency is a double-edged sword. While it encourages accountability, it also exposes gaps in supply chains, making brands vulnerable to both regulatory fines and peer scrutiny.”

On the horizon, fashion brands might find themselves curtailing to regulatory bodies, activist groups, and even consumers who have the potential to play a significant role in holding brands accountable. With the EU's Sustainable Products Initiative emphasising circular economy principles, enforcement agencies are expected to scrutinise companies more rigorously.

Recent examples, such as the French government fining brands for misleading “eco-friendly” claims, illustrate how legal mechanisms are evolving to address sustainability concerns. In a 2023 report, Greenpeace warned, “Greenwashing is not just unethical—it’s illegal. Regulators are catching up, and companies must be prepared to back up every claim they make.”

The challenge lies in navigating vague or evolving definitions of sustainability. What qualifies as “sufficient compliance” remains an open question. Until there is greater clarity, fashion brands may find themselves caught between regulatory demands and consumer expectations.

What Could This Mean for Fashion Brands?

• Increased Compliance Costs: Brands will need to invest heavily in verifying their supply chains, ensuring circular economy practices, and substantiating green claims. Non-compliance could mean hefty fines or legal fees.
• Reputational Risks: A single lawsuit, regardless of its merit, can tarnish a brand’s image. This will push brands to work closely with legal and sustainability experts to safeguard against potential lawsuits.
• Collaboration or Competition?: Unlike ExxonMobil, which faces direct competitors targeting its practices, fashion brands might find benefits in forming coalitions to standardize industry-wide compliance and avoid mutual destruction through litigation.

Lessons from ExxonMobil

The advanced recycling controversy illustrates that compliance isn’t just about meeting regulations but also managing public perception. Fashion brands can learn from ExxonMobil’s challenges:

• Transparent Communication: Clearly articulate sustainability goals and progress to avoid accusations of deception.
• Third-Party Audits: Collaborate with independent auditors to validate claims, reducing the risk of greenwashing allegations.
• Preemptive Legal Strategies: Establish protocols to quickly address and counter potential lawsuits or accusations.

The Road Ahead

The EU’s new legislations might indeed lead to a rise in court cases, as fashion brands navigate the delicate balance between compliance, competition, and consumer expectations. However, these challenges also offer an opportunity for brands to lead with proactive measures, transparency, and industry collaboration.

So as the fashion industry evolves under EU legislation, we may see a rise in:

• Preventive Legal Strategies: Brands investing in stronger compliance and documentation to defend against accusations.
• Collaborative Frameworks: Industry coalitions working to establish shared sustainability standards, reducing the likelihood of litigation.
• Regulatory Adaptations: A clearer legal framework from the EU to mitigate ambiguities and ensure fair enforcement.

Ultimately, the industry's success in avoiding a legal quagmire will hinge on transparency, collaboration, and rigorous compliance. While the courtroom may see some fashion-forward action in the coming years, a proactive approach could ensure that sustainability—rather than litigation—remains the defining trend of this era.