Published 6 February 2024
Climate change litigation globally continues to exponentially grow, with an ongoing focus on the energy sector (including plastics). Many theories form the basis of such suits against fossil fuel majors. These cases are brought by a wide range of plaintiffs, from non-governmental organizations, governments directly, as well as shareholders and interest groups. Despite the breadth of theories and diversity of plaintiffs, there is particular interest in these cases in highlighting alleged false or misleading statements (including incomplete statements) made by companies about their products/processes being sustainable or having environmental benefits, as well as actions taken by companies solely to improve public perception without any commitment to public good. Known as ‘greenwashing’, consumer protection agencies globally have identified several motivations for such statements and actions, ranging from corporate/governmental goals, product/service qualities, and investments/financial reasons.
In the U.S., the Federal Trade Commission’s (FTC) Green Guides have been a steadfast resource that highlight best practices for environmental marketing claims, primarily around substantiation and qualification of claims to help marketers avoid making environmental claims that are considered unfair or deceptive. Despite the availability of this resource, no cases have been brought by the FTC directly focused on the oil and gas sector to date. The Green Guides are currently being updated, with the proposed addition of several terms that are directly relevant to the energy sector.
Outside the U.S., there are a several laws and regulations that are either relevant to, or specifically address, misleading statements in the context of green claims. For illustrative purposes, this paper provides an overview of salient laws/regulations and regulators in the United Kingdom, the European Union, and Australia. While the specific guidance provided in each region is different, there are key principles common to all in advocating for honest and transparent communication with supporting/qualifying statements.
This paper explores the latest litigation and regulatory trends relevant to the energy sector around greenwashing claims and how companies may be responding to deal with such legal risks of suit by carefully following guidance issued by various consumer-protection agencies…or in some cases staying silent (i.e., ‘green hushing’).