Greenwashing Exposed: A Close Look at the Existing Case Law (Part 1)
As of 31 May 2023, 2,341 cases have been captured in the climate change litigation database maintained by the Sabin Center for Climate Change Law. Over the last years, more cases have been filed against corporate actors, with litigation challenging ‘greenwashing’ becoming increasingly important. Greenwashing refers to the practice of misleading consumers and stakeholders by making false or exaggerated claims about a company’s environmental performance or products. Greenwashing in the context of climate change is called ‘climate-washing’ or ‘carbon washing’. This three-part blog explains the concept of greenwashing through a systemic review of existing case law. The first part outlines different categories of greenwashing cases. The second part continues to explore the emerging legal trends and patterns in greenwashing cases. The third part examines the forms of greenwashing assessed by the domestic courts and regulatory authorities.
Different categories of cases
There are three main categories of greenwashing cases focusing on (1) ambitious corporate commitments, (2) misrepresentations about the environmental or climate-friendly attributes of the products, and (3) deceptive disclosure of climate change risks.
The first category of cases emerged in recent years and is concerned with challenging corporate commitments to achieve net zero greenhouse gas emissions. According to a 2022 survey from Accenture, more than a third (34%) of the world’s largest companies have a public net zero target—up seven percentage points since December 2021. Multiple campaigns, such as the UN-backed Race to Zero, the Science Based Targets initiative, the Climate Pledge, the Pledge to Net Zero and the Climate Neutral Now scheme, aim to mobilise non-state actors to commit to setting emissions reduction targets. Corporate climate pledges continue to increase in numbers, but so are concerns about their credibility.
In 2021, the Australasian Centre for Corporate Responsibility (ACCR), a shareholder advocacy NGO, sued oil and gas company Santos over its claims that it provides clean energy natural gas and has a plan for net zero emissions by 2040. The landmark case is the first one in the world to challenge the transparency and truthfulness of the company’s net zero emissions plan. The ACCR inter alia asserts that Santos’ climate-related statements are misleading because the net zero plan is based on untested assumptions about using specific technologies to reduce emissions, and Santos has clear plans to expand its natural gas operations. The first lawsuit challenging the corporate net zero commitments in Europe is the French case against Total, commenced in 2022 by several environmental organisations.
Description of product attributes
The second—most numerous—category of greenwashing cases concerns the environmental attributes of a particular product, packaging, or service. As of 3 October 2023, the Sabin Center’s database recorded 13 claims from this category only in Germany, but in reality, the number is likely higher. The first wave of German greenwashing claims challenged the concept of product climate neutrality where offsetting and compensation schemes were involved (see, for instance, claims about grave lights, candles, frozen croquettes, detergent, heating oil, financial product, jam, meat products, sweets, bin liners, cleaning products). Claimants typically argued that labelling the product as ‘climate neutral’ left consumers with the impression that the production and distribution occurred entirely without greenhouse gas (GHG) emissions. Most of the time, however, the GHG emissions were compensated by the defendants through carbon offsetting schemes, such as financial support for reforestation, but this information was not communicated in the publicly available materials. Many of these cases have already been decided, with the courts tending to agree with the claimants that advertisements were misleading. Manufacturers are advised to provide explanatory information about how climate neutrality is actually achieved by disclosing relevant information on the packaging, in a brochure, or via a link to a separate website. However, at least on two occasions, the German courts refrained from finding the advertisements were misleading and asserted that the term was not synonymous with ‘emission-free’ and that the former could also be replaced through compensation (claims about sweets and bin liners).
More recently, the German NGO Deutsche Umwelthilfe (DUH) revealed their plans to challenge allegedly misleading advertising claims of more than ten companies that their products (including air travel, fuels, food and cosmetics) are ‘climate-neutral’. In April 2023, DUH announced they had won the first case against TotalEnergies over ‘climate-neutral’ and ‘CO2-compensated’ heating oil claims.
Greenwashing litigation challenging the description of product attributes is not unique to Germany. In 2010, TerraChoice, a private marketing and environmental consultancy, published a report claiming that 95% of ‘green’ products were marketed via false or misleading claims. In the UK, for instance, the Advertising Standards Authority (ASA) made an inquiry into a TV ad for a new product, the Thai Wonder Grains lunch pot, advertised by Quorn Food. The ad featured a woman claiming that the product ‘helps us reduce our carbon footprint, and that’s got to be good’. The ASA ruled that the claim about carbon footprint reduction was too vague, as it did not clarify what the reduction was being measured against. Moreover, the Thai Wonder Grains pot was a new product, and it was impossible to demonstrate whether Quorn’s would implement its commitment to reducing its carbon footprint.
Climate risk deception
The final category of greenwashing cases is concerned with climate risk deception and seeks to hold fossil fuel companies accountable for downplaying the impacts of climate change. Across the United States, states and municipalities filed over twenty cases arguing that oil giants are deceiving the public about the climate damages they knew their products would cause. They rely on multiple legal bases, including common law torts, consumer protection and securities fraud, but the US courts have yet to resolve the merits of the claims. Nearly all these cases were filed by the claimants in the state courts, but the defendants fought vigorously to remove the cases to the federal courts. Over the last years, circuit courts of appeal affirmed lower court decisions that the cases should be heard in the state courts. In response, fossil fuel companies filed petitions for a writ of certiorari to the US Supreme Court. On 24 April 2023, the US Supreme Court declined to hear the petitions, ending the jurisdictional battle.
The case filed by the state of California against Exxon Mobil, Shell, BP, ConocoPhillips, and Chevron in September 2023 is the latest and promises to be one of the most prominent lawsuits targeting the fossil fuel industry over their role in climate change. Whether similar cases will emerge outside the US is yet to be seen. For instance, a recent study suggests that Italian oil giant Eni knew about potential climate change risks since 1970.
Dr Ekaterina Aristova is the Leverhulme Early Career Fellow at the Bonavero Institute of Human Rights, University of Oxford.
YOU MAY ALSO BE INTERESTED IN