The District Court of Amsterdam (the Court) recently released its decision on alleged ‘greenwashing’ claims against Dutch airline KLM (the Decision). The Court found that 15 of the 19 impugned KLM advertising statements and environmental claims were unlawful and misleading to consumers. Specifically, the Court held that it was misleading and unlawful for KLM to make advertising statements suggesting that (i) flying can be or become sustainable, and (ii) the purchase of or contribution to a “compensation” product actually reduces, absorbs or compensates for part of the climate impact of flying.
This bulletin briefly summarizes the background of the case and important aspects and implications of the Decision.
Background. Dutch environmental groups Fossielvrij Netherlands (Fossil Free Netherlands) and Reclame Fossielvrij (Fossil Free Advertising) (together, FF), supported by ClientEarth, an international environmental advocacy organization, delivered a letter to KLM in May 2022 stating their intention to file a legal claim if their demands, including calling for a ban on all fossil fuel advertising in the EU, were not met. FF and ClientEarth indicated that they were targeting KLM’s ‘Fly Responsibly’ ad campaign and the airline’s offers for customers to purchase carbon offsets to fund reforestation projects or the purchase of biofuels to offset the emissions from a customer’s flight.
FF filed a ‘greenwashing’ lawsuit against KLM in July 2022, alleging that the airline’s climate-related advertising misled the public and challenging KLM’s carbon offsetting marketing, which purported to allow customers to reduce the carbon impacts of their flights by supporting reforestation projects or the purchase of small quantities of biofuels and Sustainable Aviation Fuel (SAF).
Court’s Findings and Decision. The Court considered 19 statements made by KLM in connection with its ‘Fly Responsibly’ and ‘CO2ZERO’ marketing campaigns and ‘KLM Real Deal Days’ promotion campaign under the Dutch Unfair Commercial Practices Act and the European Union (EU) Unfair Commercial Practices Directive. The Court determined that 15 of the statements were misleading and/or qualified as prohibited trade practices. Most significant are the Court’s findings related to the use of SAF and KLM’s CO2ZERO offer that allows customers to purchase additional quantities of SAF and make financial contributions for the purchase of carbon credits from a reforestation project selected by KLM.
First, the Court determined that the term “sustainable” in SAF “is too absolute and not concrete enough” and that statements regarding the use of SAF as a “promising solution” painted “too rosy a picture”, given the limited share of SAF in total fuel consumption and that a more substantial share is only expected in the distant and uncertain future.
Second, the Court determined that the CO2ZERO service implied a link between the customer’s contribution and reducing the negative environmental aspects of the customer’s own flight. However, these statements were misleading as “there is no direct link between the customer’s tangible contribution and the impact of CO2 emissions from its flight” and the options described by KLM only provided a marginal effect and “do not result in zero CO2 emissions or undo the harmful environmental aspects of flying” in a manner consistent with what is implied by “CO2ZERO”.
The Court also noted that although some of the statements may have been factual (such as the reduction in emissions from the use of SAF), when taken in their entire context they are misleading.
FossilVrij and ClientEarth Responses. FossilVrij NL stated that the Decision “sets an important legal precedent with implications for the entire international aviation industry.” ClientEarth responded to the Decision, noting that the Court did not provide any remedies as KLM’s statements had already been retracted, and called for a ban on all fossil fuel advertising in the EU to stop companies from misleading the public over what is needed to reduce the impact of fossil fuels on the planet and people.
KLM’s Response. KLM issued a statement that did not indicate whether the airline would appeal the Decision. KLM said that it was “studying the ruling and will return to it substantively at a later date.” KLM noted that they have not used the statements “for some time now” and that the Court ruled that KLM can continue to communicate with customers and partners about their approach to making aviation more sustainable.
Climate Litigation Risks. The Decision is the latest example of the increasing number of successful climate litigation and greenwashing lawsuits. Climate litigation has been especially successful in the Netherlands where Shell was directed to reduce the CO2 emissions of the Shell group by net 45% in 2030, compared to 2019 levels, through the Shell group’s corporate policy (see our bulletin here) and the Urgenda v The Netherlands case brought against the Dutch government where the court found the government’s GHG reduction plan was insufficient and contravened the European Convention on Human Rights.
ClientEarth has similarly been successful in the UK where, in 2022, the UK’s High Court determined that the UK government’s net-zero by 2050 strategy was inconsistent with the government’s obligations under the Climate Change Act 2008 in a lawsuit brought by ClientEarth, Friends of the Earth, and the Good Law Project (see our earlier bulletins on UK climate-related cases here and here).
Increasing Oversight and Regulation. The Decision highlights the importance of careful consideration when making environmental and sustainability ‘green claims’ within the broader context of increasing legislative and regulatory oversight of such claims. Notable examples of increasing oversight and regulation include:
- the European Union’s recently adopted Directive 2024/825 to Empower Consumers for the Green Transition, which bans so-called “generic environmental claims” and certain claims based on carbon offsetting, and the proposed “Green Claims Directive” (current version of European Parliament proposed text) that would require businesses operating in the EU to assess and substantiate explicit environmental claims;
- the UK Competition and Markets Authority’s “Green Claims Code” which provides guidance on existing obligations under consumer protection law when making environmental claims;
- California’s Voluntary Carbon Market Disclosures Act (AB-1305) which requires annual disclosures by companies making “carbon neutral” and “net zero” claims; and
- priority investigations by Canada’s Competition Bureau and related proposed amendments to the Competition Act to ensure that representations of a product’s benefits for protecting the environment or mitigating climate change are supported by “adequate and proper tests”.
