Adverts with unregulated climate claims are barrier to real emission cuts – NGO lawyer
*** Please note: This interview is one part of the CLEW focus on company climate claims.
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This factsheet provides an overview of pending court cases regarding company climate claims.***
Clean Energy Wire: What difference can consumer cases against misleading corporate climate pledges make?
Jonathan White: Communication affects what people do - we know that because it's laid out very clearly in the science. If you go and look at what the IPCC, for example, or the UK Climate Change Committee says is needed to make the transition to hit climate goals, a large part of it is that businesses need to invest in different things, and therefore they need a corresponding demand. Consumers are change actors as well, they can have impact by making different choices. Greenwashing acts as a sort of inhibitor to that; it obstructs the transition.
Thus, we see these cases as very much about climate action and the practices of unregulated greenwashing as a systemic barrier to achieving climate goals. You only need to look at what happened after tobacco was banned in the UK: you had very, very large declines in the number of people smoking. It's obvious that communication impacts outcomes.
Can court judgements in greenwashing cases have ramifications beyond national jurisdictions?
Greenwashing is still a new area of litigation that courts around the world are getting to grips with. The cases against TotalEnergies and KLM airlines that ClientEarth is supporting in France and the Netherlands respectively are two of the first to challenge key types of corporate climate greenwashing under EU consumer law. [Find a summary of the cases in this factsheet]
Positive rulings in either case could spread far beyond the final decision, sending a clear message across industry that other rogue companies will face judges and regulators unless they stop misrepresenting their climate impact and plans to address it.
Also possible is a positive legal precedent which opens the door to other lawsuits on similar arguments and in other jurisdictions. With any victory comes increased awareness, which can then further shape the discourse and influence corporate, government and consumer behaviour.
Are you optimistic about the use of consumer law as a way of tackling companies on their climate claims – as opposed to the duty of care and human rights arguments that we've seen in other cases recently?
Legal action is one of the powerful tools we have to disarm the slick marketing machines used by companies to delay critical climate action and force them to start taking responsibility for the harm they cause to the planet.
When it comes to balancing consumer law with other legal avenues for holding companies to account, both and all angles are very much needed. The cases that talk about duty of care or human rights are obviously critically important. I think that the consumer law angle and the regulation of truth – which is what this is really about – is also incredibly important and you can go and read the IPCC section where it spells out all the lessons from social science and decarbonisation – it’s really obvious that the consumer law angle is about reducing emissions in a sense.
One thing I would highlight is that consumer law – compared to duty of care and human rights and some other angles that are also very important – has a very developed enforcement architecture: There are lots of actors and elements that aim to enforce it. It’s therefore important that all of the regulators of consumer law – like the competition and markets authority in the UK or the advertising regulators across Europe – play their role in checking the tide of greenwashing because their remit is to regulate the protection of consumers. You also have all the consumer associations and the competition regulators who also have their part to play in terms of enforcing the law in this area.
Is it fair to say that the legal basis you’re using for these cases is very established – you’re not having to come up with new legal arguments?
I think all we're doing is applying the existing law to the evidence, honestly. The consumer law standards prohibitions on misleading practices are near universal. It's not just a European law; the same sorts of laws exist all over the world.
You look at the environmental evidence or the evidence about what a business does and hold that up next to the environmental impact claims the business is making. If there are gaps, that risks being unlawful.
Have there been any precedents for applying the law in this way so far?
It’s unfortunately a bit of a new issue and there is a need for more enforcement in this area to send clarity to companies on what they can and cannot do. But while there aren't that many final decisions, there are a couple of important regulatory precedents that I would highlight.
I think the first one is actually Client Earth’s complaint back in 2019 against BP, which was a complaint to the corporate responsibility watchdog in the UK. This was followed by BP withdrawing the advertising in question so it didn't actually go ahead as a complaint with the regulator there. But we've seen a really wide impact. Our analysis about the mismatch between BP’s general climate claims and the reality of their business we’ve seen cropping up all over the place. For example, the city of New York's case against a large number of large fossil fuel companies, including BP, under consumer law, use the same arguments, including in relation to BP. We've seen that the same route has been used in the UK with a similar greenwashing complaint to the OECD watchdog against Drax plc and their claims about biomass.
The fastest movers are the advertising regulatory bodies, like the Advertising Standards Authority in the UK. The decisions are coming out of those fairly thick and fast. For example, there was a complaint by an ordinary person in the Netherlands against an advert that Shell put out on the radio in the Netherlands in which the company claimed to be one of the biggest drivers of the energy transition in the Netherlands. The ad regulator said, no, the energy transition is a transition away from fossil fuels and Shell is not transitioning away from fossil fuels so the advert is misleading.
While the advertising regulators are a less powerful tool than the court, a decision like the one in the Netherlands is actually quite important. It's saying that the big companies like Shell that talk about the fact that they're aligned with a safe future need to be able to prove it. And if they can't, then it's quite a simple analysis.
It's exactly the same point which is in the Totalenergies case before the French court. The TotalEnergies claim was that they are a major player in the energy transition and the court will be looking at the veracity of that claim in exactly the same way.
What elements of the proposed update to the EU unfair consumer practices directive are likely to be most useful to campaigners taking companies to court over false climate claims?
The commission has proposed a real raft of anti-greenwashing amendments that will make their way into EU law and then into member states’ law. I think there are three things I would pick out about the new EU law which are particularly relevant to the issue of climate transition and corporate publicity.
The first point is that the reforms put environmental and social impact (and also durability and reparability) explicitly on the list of main product characteristics, which, if false, could constitute a misleading commercial practice and in breach of the law. This reform sends a very important signal: misleading about environmental impact is just as illegal as misleading about the price of a product.
The second relates to vague claims. To help enforce the basic rule that environmental claims must match the environmental evidence, the reforms clarify that ‘generic environmental claims’, such as ‘environmentally friendly’ or ‘green’ or ‘biodegradable’, will be considered in breach of the law, unless they are about a product in the EU Ecolabel scheme. People are entitled to accurate, meaningful information on the environmental impact of a product or business. This reform is key to making ‘sustainability advertising puff’ a thing of the past through the law.
The two points above apply to any environmental claim a company may make. Often sustainability claims are not about specific products but about the business itself and these points are relevant either way.
The final point is on future goals. This specifically singles out marketing claims about future environmental performance, like “net zero by 2050” or “100% recycled plastic by 2030.” These claims are too often promoted without any proper basis and are not seriously pursued. Now companies marketing these goals will have to back them up with clear, objective and verifiable targets and commitments – and progress against them must be verified.
It’s important to note that all these reforms are not in our view changes to the law, they are a clarification of the existing general rule that companies may not mislead the public – which fully applies to climate claims in advertising.
Why is the EU Commission proposing these updates to the existing law?
It's doing so to protect, inform and support consumers. The EU Commission itself says that the updates are designed to enhance consumer rights so that they can actually make informed choices and play an active role in the transition to a climate neutral society. It’s essentially about making sure that consumer law is also about reducing emissions. The transition involves change in consumer behaviour as much as it does in company production.
There is a drive to correct the market on greenwashing. The commission has identified a large number of green claims that are potentially misleading. In a survey, they found that 40 percent of online green claims were potentially misleading in 2021. So they are attempting to set out and tighten the law on these issues in order to correct that developing market failure because if people don't have the right information then there's no way that we're going to make those changes in the time that we need to.
Why are ClientEarth and other organisation calling for an outright ban on advertising by fossil fuel companies?
The quickest and most effective way to stop the greenwashing of those heavily polluting companies from interfering with the energy transition is for lawmakers to treat them like Big Tobacco and ban their advertising.
As we see it, there is simply no argument that stands for maintaining or increasing the role that these fossil fuels and high emitting products and goods serve in our society so why do we need any advertising for them?
The alternative to a ban is that we simply allow the existing law or general principles to have their effect and hope that ordinary consumers and regulators and civil society from time to time are able to enforce the law against these practices and try and stop the problem in that way. The problem is that we just don't have time for that at all.
You could take the example of natural gas in the home. According to the International Energy Agency’s Net Zero scenario globally, we need to phase out the use of natural gas in home heating by 2035. In Europe, that would need to be quicker because Europe obviously has more capacity than somewhere like Eastern Africa. And that means the changes need to be happening now.
Advertising that promotes gas or the businesses that supply it in volumes that breach those goals obviously acts as an inhibitor. That's the reason why there's so many movements for a ban on fossil fuel advertising.
We have started to see regulators react. We have seen the news of the French ban come in and the city of Sydney could soon join the city of Amsterdam and a bunch of other local governments in banning fossil fuel adverts. I think this is something that is not going away.
Do you see any positive arguments for allowing companies a bit of leeway when it comes to communication? Might it help companies attract green investment, for example?
This is the argument that is often made against the idea of a ban. But the fact is that we need to think about what it is that the ban aims to target, and that is advertising. So it does not and would not affect the availability of any products. It certainly wouldn't affect the availability of finance from the banking sector or indeed the information that is given to shareholders for investment purposes in all of their corporate disclosures. And so I don't really see that it affects those things. It would be nice to think that we could leave room for the companies to move away from fossil fuels emphatically and then communicate about it whilst they're doing so. The problem is that climate change and the link to fossil fuels and the risks have been known about since at least 1988, and they haven't done that. Instead, the advertising has developed into this big inhibitor of actual climate action and the transition that we need. So, unfortunately, the case for permitting just looks like a real risk. You have to ask yourself again: what harm is really being done by removing the societal influencing tools that fossil fuel companies have when we know that their products are things we need to phase down or out?