Airlines Facing "Greenwashing" Litigation on Three Continents

For more than a decade, environmental groups have accused airlines of "greenwashing" or misrepresenting the sustainability of their business operations. Now these claims are gaining traction around the globe. These groups argue that airlines advertise as environmentally friendly while their flights contribute to climate change. Although sustainability is a long-term goal for the airline industry, airlines now face consumer protection lawsuits in the United States, Europe, and Australia over ad campaigns touting the use of carbon offsets for these future commitments.

First Greenwashing Class Action in the United States Under State Consumer Protection Law

On May 30, 2023, consumers filed a class action lawsuit against a U.S. airline, claiming the airline misrepresented its environmental impact by advertising itself as being "carbon neutral" and that consumers relied on those statements in choosing to fly on that airline. The first-of-its-kind suit in the United States alleges violations of California state law related to unfair and deceptive practices, and claims the airline's reliance on participation in the voluntary carbon market to offset its emissions makes its carbon neutrality claim false. This suit alleges the market uses inaccurate accounting and speculative emissions reduction forecasts to inflate the actual environmental effects of its projects. Among other defenses, the airline would be expected to claim that the California law at issue is preempted by the Airline Deregulation Act, which expressly preempts states from enacting or enforcing laws related to an air carrier's routes, rates, or services.

Greenwashing Claims Meet Mixed Success in European Courts

A ruling from the District Court of Amsterdam established for the first time that an environmental nonprofit has standing to bring a greenwashing claim against a Dutch air carrier under a new Dutch class action law aimed at protecting consumers and those affected by climate change. The environmental group seeks to ban airline sustainability advertising, drawing parallels to nicotine advertising to argue that airlines should not be allowed to advertise they are flying sustainably when they use fossil fuels. This litigation remains ongoing.

Separately, on June 22, 2023, a consumer protection group, the Bureau Européen des Unions de Consommateurs, and a number of its member organizations filed a complaint to the European Commission and the Consumer Protection Network, alleging that 17 European airlines have made misleading climate-related claims. The complaint alleges that the airlines have engaged in greenwashing and misleading commercial practices by (i) falsely suggesting that air transport can be "sustainable," "eco-responsible," and "green"; (ii) encouraging the payment of premiums for carbon offsetting in circumstances where the climatic benefits of the offsets are highly controversial; and/or (iii) charging customers to contribute to the development of "sustainable aviation fuels" in circumstances where the fuels are not ready to be deployed and are not forecast to be widely used for some time.

In a February 2023 decision by the Stockholm District Court, it was held that the defendant incorrectly suggested that offset credits could totally eliminate carbon footprints. On April 5, 2023, the regional court of Düsseldorf ruled in favor of German NGO Deutsche Umwelthilfe in the first of 15 greenwashing cases. The court held that the claim of a multinational energy and petroleum company advertising heating oil as "CO2 compensated" was misleading. Other pending German cases concern supermarkets, energy companies, retailers, sports teams, food companies, and one concerns an airline which had advertised a compensation scheme for CO2 emissions caused by airline flights.

Greenwashing Complaints Filed With the Australian Consumer Protection Regulator

On March 22, 2023, the Environmental Defenders Office filed a complaint with the Australian Competition and Consumer Commission ("ACCC") against Etihad Airways, alleging that Etihad made false or misleading statements about its greenhouse gas emissions and plans for achieving net-zero emissions. The complaint was filed on behalf of Flight Free Australia, a not-for-profit organization seeking to reduce climate pollution in the aviation industry. Flight Free Australia alleges that Etihad ads displayed at an A-League soccer match at AAMI Park last February stating, "Flying shouldn't cost the earth" and "Net zero emissions by 2050," were misleading because they conveyed that Etihad has no significant environmental impact and that Etihad has a credible path to net-zero emissions by 2050. Flight Free Australia seeks that the ACCC investigate Etihad's conduct and take compliance action as appropriate on the basis that Etihad has a significant environmental impact, emitting 4.31 million tonnes of CO2 in 2021, and does not have a clear path to net zero, with forecasts that its CO2 emissions will increase in 2026. The request for an investigation in the complaint is reinforced by specific reference to the ACCC's focus on greenwashing as an enforcement priority for 2023 and the significant environmental impact of the aviation industry. 

Key Takeaways

• Perceptions around carbon offsets are evolving, and companies that rely on them to reduce emissions might be at risk of greenwashing complaints and/or claims.
• Airlines and corporations in the aviation sector (and beyond) should generally take care in making statements regarding their environmental impacts and carbon offset offerings, ensuring that they are not overly broad and can be verified. Companies must be aware of local requirements governing communications on carbon compensation and offsets. Some may consider having independent, third-party verification of their sustainability efforts.
• In Australia, there are a number of pending cases which will decide key questions relating to liability risk for greenwashing in corporate announcements and marketing. In addition, the ACCC and other corporate regulators in Australia are devoting significant resources to conducting investigations and pursuing enforcement action in relation to greenwashing, and so further actions are expected imminently.
• While these greenwashing claims are similar, the results vary greatly by jurisdiction. Companies with multinational touchpoints need to be aware of differences in jurisdictions in which they operate. Several jurisdictions have rejected these claims, and companies should carefully consider available defenses.

Anika M. Smith, an associate in the Washington Office, contributed to this article.

Read the full Climate Report.