Legal challenges on greenwashing grounds rising steeply

Academics at the Grantham Research Institute on Climate Change in London are warning businesses to prepare for the “explosion” of litigation if they have not already.

They are also warning that, even if a business is not taken to court, consumers and campaign groups may look to take action through other channels, like complaints to consumer protection agencies and advertising watchdogs.

Their new report details the 26 “climate-washing” legal cases that made it into courts across the world in 2022 against players in the private sector. More than 180 other cases were filed but did not make it into court.

Most commonly, these cases challenge disconnects between businesses’ stated climate targets and strategies, plus their investments and other actions.

The report notes: “One of the most significant groups of climate-washing cases to emerge in recent years have been cases challenging the truthfulness of corporate climate commitments, particularly where these are not backed up by adequate plans and policies.”

Earlier this month, Net-Zero Tracker warned that the quality of corporate climate targets has only improved “incrementally” over the past few years.

Similarly, CDP has stated that only one-third of businesses with climate targets are either on track or almost on track to meet them. CDP has called the gap between ambition and delivery “worrying”.

Legal cases are also being flagged against businesses making misleading claims about the environmental impact of their products and services; firms with climate plans that are nonetheless lobbying against progressive policymaking; and firms which do not disclose the climate-related impact and risk information their stakeholders are demanding.

Non-disclosure is likely to become an increasingly material risk for businesses as reporting requirements are increased in Europe and other geographies.

Global snapshot

When assessing legal cases against companies on climate grounds since 2015, the researchers found the practice to be the most common in the US.

Of the 2,341 cases filed between 2015 and 2022, almost 1,600 were in the US.

Australia, in second place, saw 130 cases filed. The UK came in at third with 102 cases.

The report found that most cases have outcomes that are likely to benefit climate action. In other words, judges usually side with claimants rather than the corporations they are accusing.

Related story: Brands missing out on ‘untapped’ revenue by greenwashing and greenhushing

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