The Expanding Economic Scope of Exposure to Claims of Greenwashing

In the last decade, trends of increased attention being paid to environmental, social, and governance (ESG) issues have continued and, in many instances, accelerated. Another year of record-setting high temperatures, droughts, forest fires, and glacial melt has made climate change an almost daily headline in the news and a mainstay of conversation. At the same time, competition and market-based activities have led to an increased focus on ESG disclosures by both organizations and consumers. This scrutiny has increased in one area in particular: group and class action matters involving allegations of greenwashing.

A growing number of private litigation filings have involved allegations of fraud or negligent misrepresentation on a group or classwide basis related to greenwashing. Of particular interest, ESG disclosures and greenwashing issues have evolved and increasingly encompass not only the product or services sold, but the entire sphere of business practices of the organization, including considerations such as labor makeup and practices, corporate investments, and sources of financing.

The authors review consumer class-action cases, including trends in in litigation filings, and what this might mean for investors, consumers, and regulators.

This chapter was first published in International Comparative Legal Guides’ (ICLG) Class and Group Actions Laws and Regulations 2024.