Climate litigation has become an increasingly popular tool for a diverse range of groups promoting their interests in relation to climate change issues.
One emerging trend is a type of litigation challenging "greenwashing".
"Greenwashing" (also known as "green sheen") is when a public body or company describes its operations or its products as more environmentally friendly or "green" than they actually are. This marketing strategy is used to attract consumers who may want to invest in, or buy products from, companies with higher environmental standards or to create a positive environmental impact. Greenwashing can also be used to describe when an organisation attempts to emphasise sustainable aspects of a product or business practice to draw attention away from the organisation's involvement in other environmentally harmful practices.
Litigation in this area usually arises when consumers or other affected persons seek to hold public bodies and corporate entities accountable for their claims about their products or the nature of their operations and how they are supposedly better for the environment.
Greenwashing litigation is of increasing importance given the widespread public debate about the contribution that individual lifestyle and consumer choices have on reducing the impacts of climate change and the importance of clear and accurate messaging by companies about their "green" credentials.
We have previously looked at greenwashing claims in the context of investment decisions here. You can also read about Competition and Markets Authority's guidance on environmental claims in advertising here.
However, it is equally likely we will see an increase in greenwashing challenges before the courts as well as bodies such as advertising standards boards. Group proceedings allow groups of two or more people with the same, similar, or related claims, to unite to raise proceedings as a single action. They are therefore an attractive option for groups of consumers considering a greenwashing claim.
By way of example, in the aviation sector in 2022, Dutch campaigners Fossielvrij NL supported by ClientEarth and Reclame Fossielvrij have combined to bring a lawsuit in the Netherlands under the European Union's Unfair Consumer Practices Directive against Dutch airline KLM after it refused to stop advertising its Fly Responsibly campaign which launched in 2019.
KLM's campaign, which the claimants have labelled "greenwashing", declare that the airline is "creating a more sustainable future" and intends to reduce its greenhouse gas emissions to net zero by 2050, using a carbon offset product which KLM says fund reforestation projects or the purchase of biofuels to balance out greenhouse gas emissions.
The claimants argue that there is no such thing as "flying responsibly" and that KLM cannot claim that donations towards reforestation or biofuel costs meaningfully contribute to reducing KLM's carbon footprint. The environmental organisations argue that KLM's marketing campaign undermines the urgent action required to combat the climate crisis and that it gives consumers the false impression that air travel can be easily compensated through offsetting.
No decision has yet been reached by the Dutch courts.
Further afield in Australia, shareholder advocacy group, Australian Centre for Corporate Responsibility ("ACCR"), commenced legal proceedings against the Australian gas company, Santos alleging that it breached Australian corporate and consumer protection law by attempting to "greenwash" its operations to appeal to investors by claiming to produce "clean fuel". The shareholders also challenge Santos' claim that it will reach net zero emissions by 2040 noting its plans for fossil fuel expansion.
This is set to be a long-running litigation matter, having commenced in August 2021, and remains ongoing with ACCR expanding its allegations around greenwashing in August last year following additional information produced by Santos in the litigation discovery process.
What does 2023 have in store?
While the public sector and the oil and gas industry will likely continue to be the primary focus for climate litigation targeting greenwashing, the examples outlined above show that other sectors, including the transport sector, are certainly not out of reach and are likely to be the targets of future proceedings, including an expected increase in group proceedings. This is no surprise given the broad groups and sectors which climate change has the potential to impact.