Kmart New Zealand has been warned by the Commerce Commission for potentially misleading customers with its “100% sustainably sourced cotton” advertising.

The Commission said its investigation found Kmart’s claim implied a level of certainty the company could not substantiate, putting it at risk of breaching the Fair Trading Act.

Commerce Commission General Manager of Competition, Fair Trading and Credit, Vanessa Horne, said greenwashing was a growing concern.

“Consumers have a right to clear and accurate information, and greenwashing makes it virtually impossible for a consumer to identify if a product is genuinely sustainable,” she said. “Kmart’s absolute claim of ‘100% sustainably sourced cotton’ implies a high level of certainty that we believe Kmart did not have.”

The Commission found Kmart’s “Better Cotton” was mixed with conventional cotton in the supply chain, meaning the retailer could not guarantee all cotton in its products came from Better Cotton farmers or was sustainably sourced.

Horne said environmental claims could influence purchasing decisions and should be backed by evidence.

“We are very supportive of businesses getting involved in sustainability initiatives, but as with any advertising, claims made must be accurate and able to be backed up. Our message to businesses is simple: if you can’t back it up, don’t say it.”

Kmart removed the claim from its New Zealand website in October last year after the issue was raised by the Commission. The retailer said it continues to provide compliance training for staff on consumer and competition law.

The Commission issued a formal warning letter and said only the courts could determine whether a breach had occurred. Legal action remains an option if similar conduct is repeated.

The “100% sustainable cotton” claim ran from August 2023 to October 2024. The warning follows an open letter from the Commission and 19 other consumer agencies worldwide, urging the fashion industry to ensure environmental claims comply with the law.