When Green Undermines Gold: Sustainability Risks in Luxury Fashion

Luxury fashion — defined by heritage, craftsmanship and exclusivity — is now under pressure to operate more sustainably. As global demand for environmental and social accountability rises, even the most storied fashion houses must evolve. But with that evolution comes risk: in going greener, luxury brands may be undermining the very mystique and material superiority that set them apart.

Transparency vs. Mystique

At the heart of the tension is a conflict between transparency and tradition. Luxury thrives on tightly controlled narratives, rare materials, and selective access. Sustainability, by contrast, demands openness — public reporting of supply chains, emissions, labor conditions and sourcing. This shift can dull the aura of prestige, replacing mystique with audits and compliance language.

Brands are also expanding eco-focused offerings such as take-back programs, upcycled collections, and collaborations with environmentally conscious retailers. These efforts often emphasize affordability and accessibility. While admirable, this wider reach may dilute the sense of aspiration that luxury buyers expect. For legacy brands built on being anything but ordinary, the risk is losing the perception of being “above the rest.”

Material Tradeoffs and Consumer Backlash

Sustainability mandates have prompted material changes. Bio-based leathers, mycelium, and recycled synthetics are gaining popularity, but these alternatives often fall short of luxury’s tactile benchmarks. One viral example involved a luxury tote bag that melted in summer heat, sparking online backlash and highlighting the reputational risks of subpar substitutes — even when eco-driven.

Craftsmanship may also be at stake. Traditional artisans can be displaced by technicians as sustainable materials require more industrial processing, weakening the cultural lineage that justifies luxury pricing.

Legal Exposure and Regulatory Scrutiny

Meanwhile, legal risks are growing. In Cohen v. Kering Americas, a federal lawsuit in Illinois accuses Gucci of misrepresenting the ethical sourcing of its animal-skin products. The case signals increasing scrutiny of marketing claims about sustainability and sourcing, particularly when premium materials are involved.

Regulators are tightening standards as well. Agencies like the U.S. Federal Trade Commission (FTC) and UK’s Competition and Markets Authority (CMA) are cracking down on greenwashing, and vague promises like “planet positive” or “net-zero by 2030” now require rigorous, data-backed proof. Without that, brands risk lawsuits, reputational damage, and regulatory action.

In the U.S., proposed state laws could reshape fashion industry compliance. New York’s Fashion Sustainability and Social Accountability Act would mandate supply chain mapping, environmental impact reporting, and labor disclosures for fashion companies earning over $100 million annually. California’s Fashion Environmental Accountability Act (AB 405) takes a similar approach. Though both bills have stalled, their existence signals a shift away from voluntary pledges and toward enforceable obligations.

Strategies for Sustainable Distinction

For luxury brands, the path forward requires balance. Buyers increasingly expect ethical practices, but not if they compromise quality or exclusivity. A recycled plastic handbag may check all the boxes, but if it doesn’t feel luxurious, it loses its appeal. In this space, sustainability can’t simply be added; it must be integrated.

To achieve that integration, brands should align environmental efforts with heritage storytelling, like spotlighting regenerative farms supplying artisanal dyes. Materials must be vetted for durability, texture and brand fit, and sustainability claims must be legally sound. Disclosures should be framed in language that matches the brand voice, and messaging should favor evocative storytelling over corporate jargon. Lastly, brands must monitor online sentiment — viral consumer reviews can shape reputations faster than any official campaign.

A Closing Note

Sustainability and luxury aren’t incompatible, however, merging them successfully requires nuance, legal awareness and brand discipline. For luxury brands to remain relevant and revered, they must evolve carefully without losing the core elements that make them worth aspiring to in the first place.

Warren Koshofer is a partner in the New York and Los Angeles offices of Michelman & Robinson, LLP, a national U.S. law firm headquartered in Los Angeles. 

Juliette Donovan is a rising 3L at Fordham Law and a 2025 summer associate at M&R.