Greenwashing Litigation Focused On Carbon Neutrality Claims Increasing

Greenwashing Litigation Focused On Carbon Neutrality Claims Increasing

Global Litigation News reports that public statements about sustainability and carbon neutrality, driven by consumer demand and regulation, are increasingly the target of greenwashing litigation in the United States. 

Plaintiffs historically pounced on buzzwords like “eco-friendly” or “recyclable,” but recently, lawsuits challenging broader sustainability and eco-friendliness representations have increased.

Since mid-2023, the airline industry has been scrutinized regarding sustainability claims and long-term sustainability goals. Suits alleging fraud and false advertising focus on business strategies such as purchasing carbon credits to offset emissions.

In 2023, Berrin v. Delta Air Lines Inc., plaintiffs made claims under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act based on Delta marketing itself as a “carbon-neutral” airline. The complaint specifically referenced the purchase of carbon credits instead of cutting carbon emissions.

In March, the SEC adopted “The Enhancement and Standardization of Climate-Related Disclosures for Investors.” This regulation will require some public companies to begin disclosing climate-related risks that have or will have a material effect on their business strategy, results of operations, or financial condition.

According to the article, businesses should refrain from making generalized statements about their products, committing instead to ambitious climate pledges or bolstering their sustainability initiatives without first gathering evidence to substantiate them.

They can also take proactive steps like obtaining third-party verifications from an independent source, accurately monitoring emissions records, and auditing supply chains. 

Legal analysis of public statements for greenwashing litigation risk before publication, fact-checking statements, and training communication and marketing teams on the risks are all recommended, as are internal controls and checklists.