To meet growing awareness and demand, businesses are increasingly adopting sustainable practices to reduce their environmental impact. These practices are often marketed as “green claims,” promoting a product (or the company itself) as having a positive impact on the environment, presenting less relative damage to the environment compared to other products or companies, or promoting improved environmental impact over time. However, regulators, courts, and consumer watchdogs are increasingly scrutinizing and challenging green claims, holding businesses accountable for “greenwashing” when such claims lack adequate evidence. This scrutiny exposes businesses to regulatory, litigation, and reputational risks.
Laws targeting green claims and alleged “greenwashing” are rising across various global jurisdictions. The EU has amended its Unfair Commercial Practices Directive to address misleading environmental communications and proposed a Green Claims Directive, which would introduce strict rules on how to verify, substantiate, and communicate such claims. The UK also has a range of advertising and consumer protection regulations that apply to green claims, as well as advertising codes and guidance from its independent advertising regulator and competition authority.
In the U.S., the Green Guides from the Federal Trade Commission (FTC) set standards for the use of certain environmental advertising terms, including how consumers are likely to interpret particular claims and how marketers can substantiate these claims to avoid deceiving consumers. Actionable claims can include statements that a product is compostable, degradable, free of something harmful, non-toxic, ozone-safe, and friendly; made of recycled content; is recyclable; results in source reduction; is natural, organic, sustainable, plant-based, green, eco-friendly, biodegradable, flushable, and VOC-free; made with renewable energy or renewable materials; has a low carbon footprint; is carbon neutral; and that animals have been treated humanely. Some states, relying heavily on the FTC’s Green Guides, have enacted laws specifically targeting environmental marketing claims.
The growing regulatory environment has led to an increase in greenwashing litigation across the world, in which companies are sued for false or misleading communications about their environmental impact or practices. These cases address a range of communications, including traditional and online media, corporate websites, and sustainability reports. Greenwashing litigation spans a wide range of sectors and jurisdictions, with rulings in one jurisdiction often influencing complaints and rulings elsewhere, making compliance even more critical. In Europe, in particular, complainants have enjoyed high success rates, with adjudicators taking a strict line on formulations perceived to be vague – even cracking down on words like “sustainable” – and insisting on carefully qualified statements with robust substantiation.
Against this background, companies face increasing challenges in formulating clear, specific, and substantiated claims, ensuring consistency across their sustainability communications, and monitoring the evolving regulatory and litigation landscape. We assist clients in assessing their vulnerabilities, mitigating risks, and developing policies to manage green communications. We also assist clients in addressing complaints and litigation regarding their communications.
Our Work
We leverage our global expertise and experience in ESG and sustainability litigation, regulation, and advisory services to provide legal and strategic guidance, ensuring sustainability claims comply with regulations and align with best practices. We also offer tailored legal solutions, including risk assessments, compliance reviews, and advice on green claims.
Our representative work includes:
- Advising on risks related to companies’ specific environmental claims arising from compliance with cross-jurisdictional rules on green claims
- Advising companies on the formulation and communication of their climate targets to reduce risk of greenwashing claims
- Monitoring global greenwashing litigation developments to help spot risks as they arise in emerging jurisprudence across different jurisdictions
- Advising and training personnel in risks related to green claims and ESG regulations
- Defending clients against greenwashing claims asserted by regulators and private litigants
