Avoiding Greenwashing Liability: Sustainability and ESG Under Scrutiny

Greenwashing litigation surged in the early 2020s with activists, consumers, and shareholders trying to hold companies accountable for their sustainability claims in advertising as well as in non-traditional marketing materials like corporate ESG reports, often through class actions. 

These ESG claims were purported to be overstated, misleading, or false and unsubstantiated. While these early cases focused on false advertising and consumer protection law violations, recent cases have focused more on misleading ESG funds and investment products, net-zero targets, and carbon-neutral claims, sometimes coordinating claims across jurisdictions including the EU, UK, Australia, and the U.S. 

International, federal, and state regulators continue to target greenwashing by providing clearer rules, regulations, and definitions, powering litigation.  In the U.S., the FTC and SEC continue to work on the Green Guides and The Enhancement and Standardization of Climate-Related Disclosures for Investors respectively, while the EU continues to work on its Green Claims Directive and Corporate Sustainability Reporting Directive (CSRD).  Similarly, The UK's Financial Conduct Authority finalized the Sustainability Disclosure Requirements (SDR) and the FCA Anti-Greenwashing Rule related to investment firm and product claims.   

Listen as our expert panel discusses the status of international, federal, and state greenwashing regulation and enforcement, addresses noteworthy greenwashing litigation, and outlines considerations for defending these claims. The panel will also provide best practices for minimizing risk by conducting audits, governing internal disclosures, advising boards, and proactively engaging shareholders.