* Report challenges luxury brands on environmental standards
* No EU rules on sale of textiles containing chemical residues
* 20 brands so far signed up to Greenpeace "Detox" campaign
By Emma Thomasson
BERLIN, Feb 17 (Reuters) - Environmental campaign group Greenpeace has found traces of chemicals that can pollute waterways in children's clothing and shoes made by luxury brands, challenging the sector's reputation for higher standards than those of mass fashion.
In a report issued on Monday just before Milan Fashion Week, Greenpeace said it found the substances in products from Dolce & Gabbana, Giorgio Armani, Versace, Hermes, Christian Dior, Louis Vuitton and Marc Jacobs.
Greenpeace has been campaigning against pollutants used in the textile industry since 2011. It wants major brands and their suppliers to commit to stop discharging potentially harmful chemicals in waste water by 2020.
Concerned about toxicity to aquatic organisms and the fact some do not biodegrade easily, the European Union has restricted the industrial use of some of these chemicals but there are no rules on the sales of textiles containing their residues.
Greenpeace said 12 of the 27 articles it tested contained residues of nonylphenol ethoxylates (NPEs), used in textile manufacturing which it said can break down into hormone-disrupting chemicals when released from garments during washing.
In five items, the group said it also found per- and polyfluorinated chemicals (PFCs) used to make garments water repellent. Five articles tested positive for phthalates, used in printing designs on clothing, and three for antimony, a compound used to manufacture polyester.
The chemicals Greenpeace tested for have been commonly used in textile manufacturing, but are gradually being phased out by some brands due to concern about their polluting impact.
Reuters could not independently confirm Greenpeace's findings, which two of the companies sought to play down.
Armani said its products were "absolutely safe for consumers" as it complied with international guidelines that were more restrictive than EU environmental requirements.
Armani said it has committed to abolish all chemicals which could cause environmental damage to production sites by 2020 and is in discussion on this with environmental groups.
Louis Vuitton said all its products fully complied with international environment and safety standards, including the children's ballerina shoes and sneakers that Greenpeace tested positive for PFCs. Louis Vuitton said both had lower concentration levels than international rules required.
However, Louis Vuitton said it shared Greenpeace's concerns as it recognised "the intrinsic hazardous properties" of the chemicals used in the industry and said it was working hard to exceed current environmental standards.
Hermes, Dolce & Gabbana, Versace, Dior and Marc Jacobs were not immediately available to comment.
An industry consultant privately criticized the Greenpeace campaign, but declined to speak publicly.
Some big brands have become highly sensitive to scrutiny of their environmental standards as shoppers demand more information about how products are made, with companies like H&M and Adidas keen to portray themselves as "green".
They are among two of the 20 brands Greenpeace has already persuaded to make the "Detox" pledge, helped by supporters bombarding the firms via social media. The only luxury names to sign up so far are Britain's Burberry and Italy's Valentino.
Greenpeace said many of the products in its study were labelled as "Made in Italy", usually a by-word for quality, but still contained similar chemical residues to garments made in developing countries.
"It's time these luxury brands lived up to their reputation as fashion trendsetters, and started leading the toxic-free fashion revolution," said Chiara Campione, a campaigner for Greenpeace Italy.
Many clothing retailers have already agreed to make their clothing PFC-free but some outdoor brands have said there are currently no PFC-free technologies that would provide the same lasting level of weather protection. (Additional reporting by Isla Binnie in Milan and Astrid Wendlandt in Paris; Editing by Anthony Barker and Erica Billingham)