As oil and gas majors increasingly tout their green credentials, climate change activists who say such claims are misleading are pursuing a new avenue to hold companies to account.
While several US states and cities have filed lawsuits against fossil fuel firms over “greenwashing” in the past few years, three environmental groups took a different tack in March when they launched a landmark complaint against Chevron Corp.
Rather than going through the courts, the green groups — Global Witness, Greenpeace and Earthworks — filed a false advertising complaint against Chevron with the US Federal Trade Commission (FTC), which enforces rules against deceptive ads.
Photo: Reuters
The three organizations are hopeful that their complaint to the national agency under US President Joe Biden’s administration will gain more traction than a lawsuit filed in a federal or state court, and lay down a marker for further action against “greenwashing.”
“We would hope that a successful case against Chevron would set a precedent that would discourage other companies ... from engaging in these kinds of greenwashing tactics,” Zorka Milin, a senior legal adviser at Global Witness, said in a telephone interview.
The FTC can send warnings or seek civil or financial penalties if it finds that firms have broken advertising laws that prohibit unfair or deceptive ads. The agency has said warnings are often enough to bring offending companies in line.
The environmental groups said in the complaint that despite Chevron’s ads touting its investment in renewable energy, the company spent just 0.2 percent of its annual capital expenditure budget — about US$26 million a year — on lower-carbon energy sources.
In a statement, Chevron called the complaint “frivolous” and said it was investing US$3 billion from this year to 2028 “to advance the energy transition.”
The American Petroleum Institute (API), a leading trade group, rejected the notion that green ad campaigns by oil and gas companies were misleading, and said the industry was striving to balance new climate realities with the needs of customers.
“The record of the past two decades demonstrates that the industry has achieved its goal of providing affordable, reliable American energy to US consumers while substantially reducing emissions and our environmental footprint,” said Paul Afonso, senior vice president and chief legal officer for the API.
Public scrutiny of oil company ads over their claims to curb emissions and transition to cleaner energy is growing, and legal challenges against such advertising are entering new territory in the US in the wake of similar action overseas.
Last year, Italy’s competition authority fined energy giant Eni SpA 5 million euros (US$6 million) for ads claiming that its diesel was “green” and helped the environment.
Moreover, Britain’s advertising watchdog upheld a complaint in 2019 against an ad by Norwegian energy giant Equinor ASA that suggested gas was a “low carbon” energy source.
Global Witness said its complaint against Chevron was the first to petition the FTC to use its “Green Guides” against an oil company.
The commission’s updated 2012 guidelines aim to prevent businesses from making false environmental claims.
The FTC can take months, or years, to rule on such cases. The agency confirmed it had received the groups’ complaint, but declined to comment on whether or not it was pursuing a case.
However, Milin said she was encouraged by the appointment last week of Lina Khan as the new FTC chair.
Democrats now have a 3-2 majority on the commission, with Biden signaling he wants to use all levers of the government to spur swift action on climate change.
Various US states and cities — including New York City and the District of Columbia — have in the past few years sued oil companies over “greenwashing,” and activists say such litigation is likely to become more frequent and fruitful in the future.
Yet such lawsuits might ultimately be hamstrung by the US Supreme Court’s 6-3 conservative majority, thus highlighting the importance of new avenues such as the complaint against Chevron filed with the FTC, environmental law expert Karen Sokol said.
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