Greenwashing Defense & Litigation

As consumers increasingly demand environmentally friendly products and policies, and investors and other shareholders elevate the importance of environmental, social, and governance (ESG) criteria, many organizations have made a conscious effort to go “green.” Not only do these companies adopt sustainable and environmentally friendly practices, they often promote them in product labeling and marketing, using green buzzwords such as “recyclable,” “eco-friendly,” or “natural.” This can in turn lead to accusations of “greenwashing.”

“Greenwashing” is providing misleading information, through deceptive advertising or marketing, to persuade the public that an organization’s products, practices, or policies are environmentally friendly when in fact they are not. Greenwashing practices have come under increased scrutiny with rapidly increasing legal and regulatory risk, whether through civil lawsuits or class actions based upon state consumer protection statutes; examinations, fines, and government action by the Federal Trade Commission enforcing its Guides for the Use of Environmental Marketing Claims (the “Green Guides”); and/or shifts in other securities, consumer protection, and advertising statutes and standards. Some firms have already been forced to pay settlements over alleged inaccurate implications that their investments underwent, and passed, thorough ESG quality review.

The situation is complicated further by the fact that ESG standards are still developing. In all legal and marketing communications, e.g., those concerning goals, strategies, criteria, and credentials, companies wishing to steer clear of greenwashing claims must be sure they do what they say and they accurately say—without overstating—what they do. But without the necessary judgment and experience, this can be easier said than done.

Having the data to substantiate environmental claims is the best defense, but you need skilled ESG counsel to ensure you are gathering and presenting the right information in the right way. If you are making public statements or disclosures, we can help you vet and otherwise assess those materials and representations. And if you receive an examination letter or a notice regarding a suit or an enforcement action, consider making us your first call. In the very rapidly evolving legal and regulatory landscape, and with so much at stake, our ESG Collaborative provides sophisticated advice on greenwashing prevention, defense, and other strategies to ensure compliance and mitigate risk at every stage.