New Writing: Green claims are not just under scrutiny, but the stuff of class-action lawsuits and litigation. So, writing for The Hub, the award-winning content platform curated by Mitsubishi Electric, Jim McClelland asks: Is a greenwash case coming to a courtroom near you, soon?
Greenwash is not new. Next year marks the 10th anniversary of ‘Dieselgate’ — a scandal that saw leading automakers named and shamed, claimed against and fined for falsifying emissions figures.
Greenwash has moved on, though; and around. Now everybody sees it everywhere, as confirmed by 94% of respondents in this year’s National Environmental Services Survey.
But, anti-greenwash laws have advanced too. Legislation is established in the UK, active across the EU, emerging in Australia and the US, plus in the pipeline in India.
Today, therefore, prosecutors cast their anti-greenwash net much wider in terms of sectors and companies, not just geographies — catching everything from airplanes to apparel.
So, exactly how has this rise in greenwash become a goldrush for litigation?
Claims and directives, labels and disclosure
Well, as part of a broad bid to tackle greenwashing, the EU is currently putting the finishing touches to its impending Green Claims Directive (GCD), approved earlier this year.
In this particular policy area, however, the UK is actually a bit ahead of the game.
It was back in 2021 that the Competition & Markets Authority (CMA) first published its guidance on environmental claims, commonly known as the Green Claims Code.
Then in May this year, the UK Financial Conduct Authority (FCA) took sector-wide steps to address customer concerns by introducing its own anti-greenwashing rule. Proposals are also on the table to extend labelling and Sustainability Disclosure Requirements (SDR) to portfolio managers.
World awash with green guidelines
Last year, the Australian Competition & Consumer Commission took a lead in the southern hemisphere with its Greenwashing Guidelines, backed by the Law Council of Australia.
More recently, the State of California flew the first flag for the US when it officially passed the Voluntary Carbon Market Disclosures Act, which went live on New Year’s Day 2024.
Sending a powerful and positive signal to emerging markets and fast-growing economies, the Central Consumer Protection Authority in India has guidelines in draft form there, too.
So, greenwash law is truly going global, leaving laggards with fewer places to hide.
Enforcement: No police, no point
However, any law or policy is only as good as its enforcement: If there’s no police, there’s no point.
So, it was hugely significant for the UK that in March the CMA showed real teeth when it secured legally binding commitments from three fashion retail brands to use only “accurate and clear green claims”.
The European Commission also opened an action against market leaders in aviation in April, sending letters to 20 airlines identifying types of potentially misleading green claims.
In Australia, pension fund Mercer just got fined an eye-watering A$11.3M for greenwash.
Also, in the US, California is gunning for Big Oil with an Amended Complaint filed by the Attorney General, seeking redress for “illegally obtained profits”, Plus, over in Florida, athletiwear giant Lululemon faces a class-action lawsuit, coming just a matter of weeks after a complaint in France.
All in all, as the laws take shape, so the lawyers turn to litigation.
To read more about why this a good thing, not just for profits in the legal profession, but for best and better practice in sustainability, check out the full-length article published exclusively on The Hub:
Greenwashing, law and litigation
To view a back-catalogue of articles authored by Jim McClelland for ‘The Hub’, please see archive here.
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