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EXXON MOBIL CORPORATION

(XOM)
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Exxon Mobil : As The Green Advertising Landscape Changes, A Few Tips For The Trip

06/17/2021 | 06:10am EDT

Environmental claims in advertising - sometimes called green marketing - are important tools for companies to communicate to customers, shareholders, and the public their regard for the environmental impact of their products, operations, and activities. Environmental claims have many positives, including improving brand reputation, brand loyalty, investor interest, and employee morale. Recently, however, environmental advocacy groups and state and local governments are bringing complaints against companies for some of these claims under consumer protection and deceptive trade practices acts. These complaints assert that the claims are "greenwashing," which is claiming "green" benefits for products or corporate practices that are not beneficial to the environment overall. While caution is necessary, companies do not have to completely abandon environmental advertising. Following a few tips as your company traverses this new green landscape will ensure a smoother and more predictable journey.

Greenwashing Claims on the Rise. On June 8, 2021, Earth Island Institute filed suit against Coca-Cola Company in D.C. Superior Court for violations of the D.C. Consumer Protection Act. The Institute alleges the company falsely and deceptively portrays and advertises itself as sustainable and environmentally friendly to appeal to consumers, when in actuality, Coca-Cola's practices "are categorically unsustainable and environmentally harmful" because the company "produces an incredible amount of plastic pollution and fails to take responsibility for its own waste, despite its representations to the contrary."

The Earth Island Institute complaint is reminiscent of claims brought in 2020 by Beyond Pesticides against Exxon Mobil in the same court for alleged false and misleading advertising under the same law. Beyond Pesticides alleges that Exxon Mobil's advertising relating to its investments in alternative energy is false and misleading because it overstates how much of Exxon Mobil's business is devoted to clean energy and environmentally beneficial technology. Beyond Pesticides asserts that consumers are seeking out services or products that cause less of an adverse impact on the environment and that Exxon Mobil is actively misleading the public by presenting its clean energy activities as a significant proportion of its overall business, when actually the majority continues to be based in traditional fossil fuels and petrochemicals.

Greenwashing is also being raised in climate change cases being brought by states and municipalities against various energy companies for alleged violations of state consumer protection acts and/or unfair or deceptive trade practices acts. Cases are ongoing in Colorado, Minnesota, D.C., New Jersey, Connecticut, New York, Maryland, Rhode Island, Delaware, and South Carolina. Climate plaintiffs generally allege that companies use greenwashing to mislead and trick consumers into believing defendants are committed to addressing climate change, when they are actually just covering for their accelerating extraction, production, marketing, and sale of fossil fuels. Further, plaintiffs allege that the company knew but failed to disclose known harms associated with the use of their fossil fuel products, and instead, engaged in public deception campaigns designed to obscure the connection between their products and global warming.

In another sign of what may become a trend Earthworks, Global Witness, and Greenpeace USA filed a March 2021 petition with the Federal Trade Commission ("FTC") against Chevron, asking the FTC to apply its Green Guides against the company for allegedly misleading consumers about its actions to combat climate change. In the petition, the environmental groups claim that Chevron has overstated its investment in renewable energy and actions to curb greenhouse gas emissions. Further, they allege that Chevron consistently misrepresents its image to appear climate-friendly and racially justice-oriented, while its business operations overwhelmingly rely on climate-polluting fossil fuels, which disproportionately harm communities of color. While the FTC has no obligation to pursue litigation, administrative proceedings, or otherwise take action, given FTC and administration priorities, it is possible that they will look into Chevron's advertising claims through the lens of the Green Guides to assess whether there are issues worth investigating or pursuing.

Tips for the Trip. So, with all this new terrain to navigate, what is a company to do to ensure a smoother trip? First, while caution is necessary, companies do not have to completely abandon environmental advertising. Companies should be sure their environmental claims are truthful, non-deceptive, and have a reasonable basis, including scientific support in some cases. Steer away from general puffery. Attempt to make environmental claims as specific as possible. What particular changes have you made? How does the practice your company is promoting benefit the environment? Lastly, consider the context in which you make your green advertising claim, what consumers will take away from that claim, and whether that takeaway is accurate. In this way, a company can manage and minimize the potential risks associated with environment advertising and green marketing. Asking legal counsel for advice before embarking on this journey, and to perhaps review past statements, is also a good practice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Alexandra D. Dunn
Baker Botts
The Warner
1299 Pennsylvania Ave
NW
Washington, DC
20004-2400
UNITED STATES
Tel: 713229 1234
Fax: 713229 1522
URL: www.bakerbotts.com

© Mondaq Ltd, 2021 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com, source Business Briefing

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