Topic: Impact of greenwashing on consumer behavior in the fast fashion

industry: A case of H&M

ABSTRACT

This study will primarily examine the fast fashion industry, specifically focusing on
H&M, a renowned Swedish fashion company recognized for its competitive pricing
and global presence. The research will specifically investigate the client base of
H&M in Vietnam. The objective of this proposal is to provide a study plan aimed at
investigating the veracity of the company’s CSR reports, specifically exploring
whether they genuinely reflect the organization’s commitment to corporate social
responsibility or if they serve primarily as a means of greenwashing to enhance its
public image. This study aims to examine the relationship between the perception of
greenwashing and customers’ propensity to engage in purchase behaviors. In this
research, the researcher applies the model with independent variable as
greenwashing, while dependent variable is consumer behavior. Control variable is
green consumer confusion, green trust, and green perceived risk. Demographic
attributes applied in this research include personal information such as Age, Gender,
Education, Income, Job position, etc. The researcher specifically proposes to apply
mixed methodology, a combination of qualitative and quantitative methodology.
Regarding practical implication, despite the complexities of greenwashing and
consumer purchasing behavior, this study will help explain ethical consumer
perspective of greenwashing. The key findings show how greenwashing affects
ethical norms. Thus, this work will advance the field.
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1. Introduction

1.1. Practical problem

According to a report by Global Fashion Agenda and Boston Consulting Group

(2017), the potential annual revenue for garment corporations might reach 160 billion
euros if they adopt ethical and socially responsible practices in their operations.
Furthermore, it has been shown by researchers that there are significant
stakeholders, such as customers, investors, and workers, who exhibit a preference
for ethical organizations and express disapproval towards those that engage in
irresponsible behavior (Du et al., 2010). The incorporation of Corporate Social
Responsibility (CSR) by a business, alongside a robust strategic framework,
technological progress, and innovation, can be seen as a pivotal factor in
ascertaining its competitive edge within the current context of resource constraints.
Nevertheless, a company will also experience negative consequences if it
exclusively perceives corporate social responsibility (CSR) as a strategic maneuver
aimed at enhancing its public image and financial gains.

While several enterprises have demonstrated exceptional performance in the realm

of corporate social responsibility, there are also companies, particularly those in the
fast fashion industry, that exhibit contrasting behavior. Fast fashion firms employ
corporate social responsibility as a strategic marketing tactic to enhance their public
image and artificially inflate the perceived worth of their products. The phenomenon
of greenwashing, as identified by Henninger et al. (2016), pertains to the
misrepresentation of products as environmentally friendly when, in fact, they do not
meet the necessary criteria. This deceptive practice is commonly observed in the
fast fashion industry, where corporations manipulate corporate social responsibility
reports and falsify numbers, so casting doubt on their accuracy and integrity.
Greenwashing refers to the deliberate practice of misleading consumers regarding a
company’s commitment to social responsibility or the purported sustainable benefits
of its products and services. Implementing green techniques can be tough due to the
need for thorough preparation and higher costs. In contrast, greenwashing offers a
relatively easier means of deceiving customers, either momentarily or over the long
term, in order to maintain an appealing and competitive image.
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1.2. Theoretical problem

Nguyen et al. (2020) note that greenwashing is novel in underdeveloped nations but
has received considerable scholarly attention in recent years. Experts are giving
more thought to sustainability in the fashion industry because of the rapid pace at
which technology is causing fashion trends to change. Adolescents, in particular,
exhibit a tendency to readily discard functional items when they become
unfashionable, frequently opting to replace them prematurely (Thorisdottir &
Johannsdottir, 2020). The key components of sustainable fashion encompass ethical
design and sourcing practices, utilization of environmentally friendly materials and
production methods, regionalized production, waste minimization, recycling
initiatives, adherence to fair trade principles, equitable remuneration, transparency in
operations, and the active engagement of conscientious customers. Several
objections have been raised regarding the excessive utilization of natural resources
and the prevalence of labor abuse, and have grown more serious over time, but
others, such as unsafe working conditions, low salaries, neglect of human rights, and
poor environmental performance, remain in place. The fashion industry must
transform with an unprecedented level of dedication, collaboration, and creativity in
light of the growing negative influence and the risk of long-term negative results
(Colucci et al., 2019).

Research reveals that fashion companies are not taking corporate social
responsibility seriously, despite the fact that it is past time for them to develop
policies to address concerns relating to the environment and society. To achieve this
goal, the fashion industry, its suppliers, and other stakeholders must adopt a
transparent pricing and production strategy and work together to create
environmentally friendly goods (Thorisdottir & Johannsdottir, 2020). Consumerism is
believed to be associated with challenges in corporate social responsibility within the
fashion industry, since consumers show little interest in buying sustainable clothing
due to the lack of appeal in terms of style and aesthetics. Hence, to incentivize a
greater occurrence of desirable behaviors, fashion designers might assign a
heightened significance to the creation of environmentally sustainable clothing
designs, while concurrently upholding style and brand identity (Angelis et al., 2016).
It’s easy to see why customers would feel this way if they view clothing as a
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reflection of their personality or a means by which to express their social standing in

the world. As a fresh approach is needed for CSR communication, raising
customers’ awareness of sustainability issues through marketing or social media
might be a successful tool. International and domestic fashion brands alike
(Thorisdottir & Johannsdottir, 2020) agree that educating consumers about the
benefits of eco-friendly clothing requires a more nuanced approach to advertising.

In general, it is able to see that although there are many pieces of research in CSR
in general, but there has not been yet any study on greenwashing in the fast fashion
company, especially in the case of H&M. Therefore, theoretically, this research is
implemented to fulfill the research gap.

1.3. Management problem

The primary goal of this proposal is to outline a strategy for investigating whether or
not H&M’s CSR reports are completely made up. Three specific goals guide this
study: (1) defining consumers’ perception of greenwashing in the fast fashion
industry; (2) assessing H&M’s CSR implementation and discovering the veracity of
its CSR reports; and (3) taking customers’ reactions to the company’s use of CSR as
a marketing strategy, also known as greenwashing, into account.

It is suggested that the study target the fast fashion industry, which is exemplified by
H&M, a Swedish fashion brand recognized for its low prices and global reach, and
their customers in Vietnam. This examination’s research process is anticipated to
include two parts and make use of a mixed-method approach. The first section of
this study analyzes the CSR reports of the H&M Group, the company selected for
this study, in terms of its supply chain and product value. The next step involves
processing quantitative primary data collected by questionnaire and analyzed with
statistical analysis methods to determine the strength of the correlation between the
aforementioned values.

2. Literature review

2.1. Literature review

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2.1.1. Green consumer confusion

Consumer confusion refers to the lack of ability to build a coherent comprehension of

the attributes of a product within the framework of information processing (Turnbull et
al., 2000). According to Chen and Chang (2013), green consumer confusion refers to
the inability of consumers to accurately comprehend the environmental
characteristics of a product or service throughout the stage of information
processing. Consequently, the purchaser encounters obstacles in effectively
comprehending the information presented and fully recognizing the ecological
advantages of the product. The primary objective of greenwashing, as previously
stated by Martnez et al. (2019), is to manipulate the public’s view of a firm or product
by diverting attention from any negative environmental characteristics it possesses.
When consumers encounter green claims that are vague and lack adequate factual
proof, they experience confusion. The reason for this phenomenon can be attributed
to consumers’ inadequate understanding of the product and the company, which
hinders their ability to make an informed judgment regarding the credibility of
environmental claims. The practice of greenwashing poses a challenge for
consumers in discerning the authenticity of environmentally friendly items. The lack
of a coherent understanding of the credibility of green claims may result in confusion
among customers, hence leading to green consumer confusion.

2.1.2. Green perceived risk

According to Martnez (2019), there exists a negative correlation between perceived

risk and both perceived reward and customer happiness. The author further
advances the argument by asserting that the conviction held by customers regarding
a product is a fundamental prerequisite for engaging in a purchase, and that
greenwashing erodes this confidence. Once consumers become aware of
greenwashing, their perception of the potential hazards associated with the product
increases. Consequently, a strong correlation exists between feelings of
apprehension regarding a purchase and an individual’s recognition of prospective
risks. With the increasing prominence of environmental concerns such as climate
change, consumers have recognized the necessity to alter their purchasing
behaviors and adopt a more environmentally responsible approach (Chen & Chang,
2013). The primary objective of environmentally conscious consumers is to acquire
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products that align with their individual criteria for environmental sustainability. Chen
and Chang (2013) posit that the rise in popularity of the green movement has led to
an increase in consumers’ perception of green risk. This heightened perception is
attributed to customers’ growing concern for the environmental impact of their
purchasing decisions. The level of perceived risk associated with green products
increases when consumers have lower levels of faith in the product’s ability to meet
its green claims and fulfill their environmental requirements.

2.1.3. Green trust

Trust in a product or service’s credibility, generosity, and ability to perform well in

terms of the environment is what Chen (2010) calls “green trust.” The customer has
faith in the company’s honest and altruistic practices, as well as its positive impact
on the environment. According to Horiuchi and Schuchard (2009), as cited in Chen
and Chang (2013), it is posited that consumers would perceive companies as
actively participating in environmentally sustainable practices if a significant number
of companies implemented substantial green initiatives and effectively
communicated these efforts in a truthful and credible manner. Consequently, this
would result in an elevation of green trust towards these environmentally conscious
companies. The level of confidence in organizations that make claims about their
environmental practices is diminished due to the regular occurrence of companies
fabricating or overstating the environmental advantages of their products (Kalafatis &
Pollard, 1999).

2.1.4. Adverse impact of green consumer confusion and green perceived risk on
green trust

Consumers are understandably wary of spending money on a product that leaves

them scratching their heads. According to Walsh and Mitchell (2010), this leads to a
considerable decline in consumer trust. Consumers are starting to doubt the integrity
of businesses whose marketing strategies are too difficult to decipher (Walsh &
Mitchell, 2010). Therefore, consumers are more wary of businesses if they believe
green marketing claims to be dishonest. According to Chen (2010), consumers’ faith
in the green market decreases as their level of confusion regarding green claims
increases.
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The perception of risk associated with green products may result in a decline in trust
in environmentally friendly options, prompting purchasers to actively seek out
products that are more ecologically sustainable. Customers who have experienced
green perceived risk know that there is a chance that the product they are buying will
not provide the promised environmental advantages. The perception of
greenwashing raises concerns about environmental safety and reduces confidence
in environmental initiatives. Trust in green claims is inversely related to green risk
perception, as stated by Gillespie (2008).

2.2. Research model

As explicated in the preceding sections, the phenomenon of greenwashing has

several effects on consumer behavior. Based on the findings of a study done by
Chen and Chang (2013), previous research has suggested that greenwashing has a
positive influence on green consumer confusion and green perceived risk, while
having a detrimental impact on green trust. The objective of this study is to employ
the conceptual framework established by Chen and Chang (2013), while expanding
upon the results of the aforementioned previous studies.

Figure 1: Research model

Source: Chen and Chang (2013)

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In this model, independent variable is greenwashing, while dependent variable is

consumer behavior. Control variable is green consumer confusion, green trust, and
green perceived risk. Demographic attributes applied in this research include
personal information such as Age, Gender, Education, Income, Job position, etc.

2.3. Hypotheses

This study developed five hypotheses to examine the potential effects of

greenwashing on consumer behavior, based on the current literature on
greenwashing, green consumer confusion, green perceived risk, and green trust.

Hypothesis 1 (H1): There exists a positive correlation between greenwashing

and green consumer confusion.

Hypothesis 2 (H2): There exists a positive correlation between greenwashing

and the perception of green risk.

Hypothesis 3 (H3): There exists a negative correlation between greenwashing

and green trust.

Hypothesis 4 (H4): There exists a negative correlation between green

consumer confusion and green trust.

Hypothesis 5 (H5): There exists a negative relationship between the perception

of risk connected with green products and the level of trust placed in these
products.

3. Methodology

3.1. Research process

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Figure 2: Research process

Source: Researcher (2023)

The initial stages of the research process involve the identification and delineation of
a research problem, followed by a comprehensive review of existing literature to
acquire a comprehensive understanding of the relevant background and context.
The selection of a study topic provides the foundation for the development of
research questions and objectives by the researcher. The formulation of a research
study plan is essential in order to determine an appropriate sample size and facilitate
the collection of data from such sample.

3.2. Research methods

This study aims to utilize a mixed methodological approach, which combines

qualitative and quantitative methods, commonly employed in the field of social
sciences (Anttila et al., 2017). The rationale for this is that the integration of
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qualitative research with quantitative research approaches has the capacity to

generate a more lucid and all-encompassing depiction (Dikko, 2016). This study
examines the experiences, perspectives, beliefs, and lifestyles of Vietnamese
consumers in relation to greenwashing, specifically focusing on the case of H&M.
The researcher conducted an in-depth investigation into the corporate social
responsibility activities of H&M Company. Subsequently, a survey involving
participants in the role of customers will be considered.

The researcher intends to gather secondary data on the corporate social

responsibility (CSR) procedures of H&M Company. This will be accomplished by
examining the company’s annual reports, relevant articles, and peer-reviewed
journals. The utilization of secondary data will be 20% of the overall dataset
employed in the research. To investigate the correlation between greenwashing and
green consumer confusion, as well as the impact of green perceived risk and green
trust, a survey will be administered to collect primary data, which constitutes the
remaining 80% of the data. The survey instrument will be constructed using the prior
scholarly work conducted by Chen and Chang (2013). Its primary objective is to
investigate the proposed hypotheses and address the existing research void. The
research will employ a convenience sampling method, as the survey will be
administered online, primarily targeting students and young individuals who are
readily accessible.
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