Legal's role against greenwashing.

8 minutes read: OpEd "?Legal's role against greenwashing." | Over the Horizon "?World’s first zero emissions cement" + news on UK Electric Vehicles, HSBC Climate controversy & ?rsted's Coral Farms , - from the desk of The Green Link's team.

Op-Ed_

Legal's role against greenwashing.

Regulators are increasing the pressure for truth, worldwide.

In previous decades, hopes were placed on companies to do better, because it was the right morale thing to do. Sadly, that line of thinking hasn't delivered sufficient positive outcome to curb our planet climate trajectory. And we've noticed in recent years a strong movement towards more regulation regarding Sustainability which, once implemented, pave the way for legal actions.

According to the?latest UN Intergovernmental Panel on Climate Change (IPCC) report, climate-related litigation “has influenced the outcome and ambition of climate governance.” The report insists on the role of the climate litigation arena for various actors to confront and interact over how climate change should be governed.”? As we'll see, easier litigation seems to be a mainstream avenue for consumers, government and NGOs to "nudge" eco-unfriendly corporations change their habits.

Among the regulations making litigation easier, actors can leverage - depending on their geographies - a wide range of framework & new rules:

• In the US, the?SEC's new proposed climate rules would require businesses to provide a big-picture view of a company's environmental impacts as well as qualified & quantified specific climate risks and exact greenhouse gas emissions data.
• In Europe, the Sustainable Finance Taxonomy Regulation?came into effect on Jan 1st, 2022. This taxonomy aims to be the EU go-to-dictionary to classify whether activities may and may not be called sustainable.
• In the UK, the?Advertising Standards Authority also brought about on Jan 1st 2022 new advertising guidance on misleading environmental claims and social responsibility. The ASA has the specific intent to first focus on claims made on the issue of waste (for example, ‘recyclable’/’recycling’, ‘biodegradable’ / ’compostable’ and “plastic alternative” claims). During the Fall, the ASA will focus on meat-based, dairy and other forms of food advertising sustainability issues.

Welcome to the "Carrot AND Stick" era of sustainability in business.

False sustainability claims are now a real legal risk, not just a PR one.

The Grantham Research Institute on Climate Change & the Environment holds a public database of currently 1,974 climate litigation case from around the world. Quite an interesting read if you have a bit of time.??

And it’s not just for oil companies like Shell or Exxon. Food & beverages, cosmetics, transports companies and even financial institutions are now facing ever increasing court actions.?

According to a recent analysis performed by Catherine Higham and Honor Kerry “while fossil fuel companies remain a primary target of activist litigation, climate litigants are now casting their net more broadly.” – full analysis available here.?

Now let’s have a look at some of the most iconic cases over the last year:

• May 2021 - Netherlands – Shell (Energy), is ordered to?Shell to cut its activities’ carbon emissions by 45 percent compared to 2019 levels to align with the Paris?climate agreement.
• June 2021 – Denmark -?Danish Crown?(Food), is taken to court by NGOs over the?misrepresentation of?its carbon footprint in?a?marketing campaign which also claimed that the meat is “more climate friendly than you think.”.
• August 2021 – USA – TerraCycle (Environmental Services), a leader in the recycling space, and eight product companies, including L’Oreal USA and the Coca-Cola Company are sued by The Last Beach Cleanup NGO on the ground that the group’s recycle by mail scheme is promoting “false solutions” to the plastic waste crisis with aims to “fool the public.”?
• September 2021 – Germany – BMW & Daimler (Transport) are sued by an NGO for insufficient climate actions to keep up with Germany’s emissions budgets
• November 2021 -Germany - Volkswagen (Transport) is sued by Greenpeace Germany and Fridays for Future Germany for a lack of commitment to phase out internal combustion engines (ICE) cars by 2030.
• January 2022 - UK - Lipton Ice Tea and Aqua Pura?(Food) water ads banned over “100% recycled plastic” bottle claims.
• April 2022 – USA - Walmart and Kohl’s (Retail) have been fined $ 5.5 M USD by the Federal Trade Commission for allegedly marketing “bamboo” textiles produced using eco-friendly processes.
• May 2022 – Netherlands – KLM (Transport) is being sued by environmental campaigners over “greenwashing” in its ‘Fly Responsibly’ campaign misleading customers on the “sustainability of flying” in addition to a warning by the Dutch advertising regulator on its “Be a hero, fly CO2 zero” earlier in April
• May 2022 – USA – Exxon (Energy) fails to dismiss a pending climate change case in a unanimous 7-0 vote by?Massachusetts?High Court. The case is about Exxon misleading consumers about the impact fossil fuel products had on climate change and deceiving investors about the climate-driven risks facing its business.?
• June 2022 – Germany - Asoka Woehrmann, CEO of DWS (Finance), resigns hours after a police raid on DWS and Deutsche Bank over greenwashing allegations -?

And this is just the tip of the iceberg, with awareness and regulation ever increasing, we can expect more and more of such cases to pop-up around the world.

If you think you’ll get away with it as always, think again!

Take the legal implication seriously

a) Legal teams need to start their sustainability transformation journey.

Like any other function, the legal team has a role to play in improving the company's environmental footprint. Like any other function, they can leverage existing operational best-practices to kickstart their sustainability journey (hint: start with adopting electronic signature to reduce paper waste). But sustainability will also expand their role.

More and more, legal teams will have to act as internal sustainability advisor for both traditional contracting purposes but also in many operational levels such as reporting disclosure, marketing campaigns...

This advisory role will require new training for the legal teams on both what is sustainability and what are the different new regulations mechanisms that will apply to the company's industry & geography.

b) Have the courage to go-back to the drawing board if needed.

Regardless of the role of your company in the value-chain, the pressure will keep on increasing towards more transparency, truth and accurate information. While we’ve seen large players being taken to court, the same pressure also applies to smaller brands as well.

Take inspiration from leaders like Lindsay McCormick, founder of California based plastic-free toothpaste company Bite. Lindsay bravely choose to redesign her toothpaste-formula after her customers challenged the zero-waste company's usage of eco-certified palm oil in its toothpaste bits.?

Call to Action?

Thrive for the truth! Set high moral standards - there can be no compromises regarding sustainability claims.

Whatever your role is in your company, engage in an honest open dialog when you read / encounter loose claims that smells like greenwashing.

Use?UK’s Advertising Standards Authority screening framework to help you frame the conversation:

1. Is the claim truthful and accurate??
2. Is the claim clear and unambiguous?
3. Is the claim omitting or hiding important relevant information?
4. Are the comparisons fair and meaningful?
5. Is the claim considering the full life cycle of the product or service?
6. Is the claim substantiated?

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Like what you're reading??Find out more about?The Green Link's?Sustainability as a Service offering - helping companies go from strategic intent to positive impact leveraging Artificial Intelligence sensing?engines & our 1,260+ operational best-practices & 4,829+ cleantech technology.?Access our website for more details.

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Over the Cleantech horizon_?

[ Cambridge Electric world’s first zero emissions cement ]

A recent, patent-pending, discovery made by Dr Cyrille Dunant, Dr Pippa Horton and Professor Julian Allwood, three Cambridge University Engineers, promises cement creation in a virtuous recycling loop without emissions.

This feat is achieved by using concrete waste from demolition building in conventional steel recycling processes. At the end of the process, once the steel has been collected, the remaining powder is virtually identical to the clinker which is the basis of new Portland cement.

Quoting Professor Allwood: ‘Combining steel and cement recycling in a single process powered by renewable electricity, (...) could secure the supply of the basic materials of construction to support the infrastructure of a zero emissions world and to enable economic development where it is most needed.’ More details on this invention here.

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In the news_

[UK: Three quarters of a million EVs now on roads]

Electrification is the future of the automotive industry, that goes without saying. What's interesting is to see the pace at which massive adoption is building up both by individuals & companies.

Recent figures from Society of Motor Manufacturers and Traders point to a rise of 71% vs 2021 and an impressive overall UK fleet of three quarters of a million electric vehicles on the English roads. This represents 720,053 cars, 26,990 vans, 993 buses and 313 trucks. More about this here.

[HSBC's Head of Responsible investment climate controversy]

Stuart Kirk, HSBC's previous Head of Responsible investment, created a massive controversy when he talked about "why investors need to worry about climate risk" at the FT Live Moral Money Summit Europe conference. In his speech (video link), Stuart basically accused central bankers and policymakers of overstating the financial risks of climate change... A jaw-dropping moment, wouldn't you say?

HSBC has since decided to suspend Stuart Kirk and Nicolas Moreau, HSBC’s asset management unit CEO , issued a statement disavowing Kirk’s speech. The remarks “do not reflect the views of HSBC Asset Management nor HSBC Group in any way”.?

[?rsted’s Wind Turbine’s ReCoral project]

In a smart use of existing infrastructure to counter the effects of climate change,??rsted,?the?Danish energy company, is piloting an experiment to grow corals on sea wind turbine foundation.

By taking advantage of the more stable & colder temperatures around the base of offshores wind farms, ?rsted with Penghu Marine Biology Research Center in Taiwan hope to create growth & farming capabilities to help reinvigorate coral reefs which provide habitat for an estimated 32% of all marine species worldwide.

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If like WWF, Groupe BEL, Novo Nordisk?, L'Oréal, HBC Nantes you'd like to go from strategic intent to positive impact faster, reach out to us.?

The Green Link?helps companies move from Sustainability strategic intent to positive impact enabling real financial, social & environmental ROI through proprietary?AI sensing?engines and a library of 1,266+ best-practices and 4,829+ clean technologies.?

If you know companies that want to tackle their environmental footprint and move faster to positive impact bypassing the white page syndrome, send them our details: [email protected] and let’s have a chat.