Introduction
Litigation involving climate-related claims and initiatives remains a source of exposure for companies across all sectors. As the Trump administration reshuffles federal priorities, we expect that consumer litigation and “blue state” attorney general (AG) enforcement may intensify to promote integrity around climate claims in the face of federal animosity toward climate mitigation, while the focus of shareholder derivative actions may shift to discourage climate disclosures following the death of the SEC climate disclosure rules. This document provides a brief overview of recent litigation trends in this space and key takeaways for companies navigating and seeking to mitigate risk in this rapidly evolving landscape.
In the last few years, increased scrutiny by the plaintiffs’ bar of carbon-related product and operational claims has generated a gradual uptick in class action lawsuits alleging false and misleading advertising. The statements at issue have included carbon-neutral claims or net-zero claims, claims related to climate-related goals, and claims underpinned by the use of carbon credits. The initial wave of cases tended to target industries associated with higher carbon impacts (like air travel), but plaintiffs in those cases tended to struggle to establish standing or to get past the pleading stage. More and more, these suits are aimed at consumer products, and plaintiffs, drawing on lessons learned in the earlier cases, are surviving motions to dismiss. But we are also seeing businesses in the consumer products space learning from prior litigation and fine-tuning or omitting their carbon-related claims to reduce their exposure.
See specific case examples and summaries.
Securities class actions premised on misleading environmental claims have continued to hit dockets at a slow but steady pace. These cases have seen mixed results, with some being dismissed on the pleadings, and one settling for $9.5 million, but only after plaintiffs abandoned their greenwashing claims.
In these cases, investors generally claim that companies have misrepresented or overstated the climate impacts of their products or operations, either artificially inflating the value of their stock or, when those misrepresentations or overstatements are publicly revealed to be false, causing the value of their stock to decrease. In claims against fossil fuel and energy producers specifically, plaintiffs also allege that the companies have misrepresented the value of their products in the future as the global economy transitions away from carbon-intensive fuel sources.
Against the backdrop of the Trump administration’s rollback of the SEC’s climate disclosure rules, we expect these more traditional public misrepresentation cases to remain the prevailing private securities litigation enforcement tool, with little expected in the way of SEC enforcement. We also anticipate a potential shift in the nature of derivative litigation, whereby shareholders target climate initiatives and disclosures as a source of undisclosed exposure, i.e., that in the current climate, companies are not accurately and transparently disclosing risks to stock value and litigation associated with allocating company resources to climate accounting, mitigation, and consumer-facing claims.
See specific case examples and summaries.
Recent developments in climate-related investigations highlight a growing focus on the integrity of voluntary carbon markets and the influence of Environmental, Social, and Governance (ESG) initiatives.
Federal agencies, such as the FTC, SEC, and DOJ, are increasing their scrutiny of carbon credit projects, with notable enforcement actions targeting fraudulent schemes. These actions respond to a broader shift toward skepticism around carbon credits and aim to ensure transparency and ethical practices. As climate-related markets expand, there is a rising concern about the validity of carbon credits and the need for stronger data verification, creating a more transparent environment for businesses, investors, and consumers. Project proponents and carbon credit registries may continue to face more oversight as regulatory agencies ramp up enforcement efforts.
Leading up to the transition to the Trump administration, there also has been a rise in political and legal challenges related to ESG investing. Congressional investigations and state-led initiatives are questioning the role of financial institutions and activist groups in pushing decarbonization goals through coordinated actions, such as shareholder engagement and board influence. These investigations, particularly from Republican lawmakers, suggest that ESG strategies may be undermining market competition and violating antitrust laws. As these debates unfold, companies involved in ESG activities are likely to face heightened legal risks, forcing them to carefully navigate the intersection of climate goals, market competition, and regulatory compliance.
See specific enforcement action and investigation examples and summaries.
In recent years, state attorneys general (AGs) have brought a number of climate-related actions based on state common and statutory law to impose penalties on companies for either causing climate change or misrepresenting their environmental impact or climate goals. We expect an uptick in these suits over the next few years. While the Trump administration has pledged to roll back Biden-era federal climate policy, several state governors and AGs have pledged to aggressively pursue their own climate policies in response. We have already seen significant growth in litigation claiming that companies with net-zero, carbon neutrality, and other similar climate goals and commitments are engaged in greenwashing. Both left-leaning state AGs and consumers allege that such goals and commitments, in the absence of concrete plans to achieve them and/or proof of progress, are misleading.
However, we also anticipate that increased hostility toward ESG from the Trump administration will ignite the threat of enforcement from right-leaning state AGs, who may contend that climate disclosures and initiatives are inherently misleading because climate change itself is bogus.
Either way, AG enforcement may also lead to “greenhushing,” or the removal of such goals and commitments by companies to avoid potential liability. Currently pending state AG cases are in early stages, so it is difficult to predict their success, but a number of high-profile suits have faced hurdles at the motion-to-dismiss stage, which will prove instructive as state AGs file more lawsuits in this area.
See specific case examples and summaries.
Climate- and carbon-related claims have also been steadily in front of the National Advertising Division (NAD). These claims, while short of litigation, can impact a company’s exposure to future litigation. They also provide helpful third-party analysis regarding how specific advertising aligns with the FTC’s Green Guide guidance. Specifically, cases in front of the NAD involve a careful parsing by the NAD of a multitude of climate- and carbon-based claims, providing helpful analysis for companies as they continue to navigate in these novel marketing spaces. These cases consistently show that the NAD is focused on the tailoring and specificity of the messaging to ensure transparency and accuracy. Companies should continue to carefully parse the language of these environmental claims and the closeness of the tie between the claim and the substantiation. These cases also mirror other areas of litigation discussed above in heavily scrutinizing net-zero claims and claims of neutrality for a product or a company’s operations.
See specific decision examples and summaries.
Consumer Class Actions
Specific Case Examples
1. Dib v. Apple, Inc., No. 5:25-cv-02043 (N.D. Cal. 2025)
Claims: Putative consumer class action alleging claims that Apple Watches are “carbon neutral” were false and misleading. Plaintiffs allege Apple relied on deficient carbon credits and should have known that the projects generating the credits were not additional.
Status: Ongoing. Apple filed a motion to dismiss for lack of jurisdiction on April 28, 2025. Plaintiff subsequently filed an amended complaint on May 19, 2025.
Significance: The case represents a shift in focus away from scrutinizing the level of substantiation companies provide (or fail to provide) to support carbon neutrality claims, and toward the integrity of the carbon projects on which companies rely, as well as the level of knowledge companies are expected to have with regard to those projects. Though whether plaintiffs can survive a motion to dismiss on this theory is yet to be seen, companies wishing to minimize litigation exposure in the first place should carefully diligence the projects that source the carbon credits or offsets they purchase to support climate claims.
2. Environmental Working Group v. Tyson Foods, Inc., No. 2024-CAB-005935 (D.C. Super Ct. 2024)
Claims: Environmental interest group claim alleging that Tyson’s commitment to net-zero by 2050 claims and “climate-smart beef” program are misleading due to the large emissions footprint of beef production and a lack of concrete plans to reach its goals.
Status: Ongoing. The court denied Tyson’s motion to dismiss on February 3, 2025, on the grounds plaintiff sufficiently pled that Tyson’s commitment to net-zero by 2050 claims were false or misleading because Tyson could not meet its net-zero goal. Tyson argued that it had taken concrete actions to reduce its climate impact, such as investments and gathering of emissions-related data, but the court reasoned that plaintiff had not alleged that Tyson was doing nothing, just that Tyson was not doing enough to meet its goals. Tyson also argued that its statements were not misleading because technology may advance in the next 25 years to enable it to meet its goals, but the court held a reasonable consumer would expect a net-zero by 2050 claim to be backed up by a realistic plan with current technology. The court also found the term “climate-smart beef” could be misleading because Tyson had not defined the term or provided data to support that it met any standard. Finally, Tyson argued that plaintiff’s claims were barred by the First Amendment. The court held that the statements at issue were “clearly commercial speech” and therefore not afforded protection.
On February 27, 2025, the Center for Constitutional Responsibility filed a motion to intervene as defendant.
Significance: Forward looking net-zero claims and net-zero goals carry risk of being deemed false or misleading if not properly qualified and supported by comprehensive data and specific steps the company has taken toward the goals.
3. Gyani v. lululemon Athletica, Inc. et al., No. 1-24-cv-22651-BB (S.D. Fla. 2024)
Claims: Putative consumer class action alleging that lululemon’s “Be Planet” marketing campaign was false and misleading, as it implied that lululemon’s products were environmentally friendly and had a positive impact on the environment.
Status: Dismissed. The court granted lululemon’s motion to dismiss without leave to amend on February 18, 2025. The court held that plaintiff had not sufficiently alleged a price premium, as “mere allegations of having paid a price premium are insufficient—a plaintiff must tie the value of the product to any purported misrepresentation.” Plaintiff sought leave to amend, but it was denied by the court, as the request was not procedurally proper.
Significance: Businesses may successfully defend carbon-related false advertising suits by zeroing on plaintiff’s price premium theory; did plaintiff tie the value of the product at issue to the alleged misrepresentation?
4. Blackburn v. Etsy, Inc., No. CV 23-05711-PA-MAR (C.D. Cal. 2023)
Claims: Putative consumer class action alleging that Etsy’s claims that it offset 100% of carbon emissions from shipping were false and misleading because they were predicated on offsets that were calculated by offset vendors utilizing flawed methodology and fraudulent accounting. Plaintiffs alleged that Etsy knew that its carbon offsets overstated their effects, were nonadditional, did not provide immediate carbon reductions, and could not guarantee future carbon reductions.
Status: Dismissed. On October 12, 2023, the court granted Etsy’s motion to dismiss with leave to amend. The court held that plaintiffs did not have standing, as they could not plead that they had paid a price premium because of Etsy’s claims. The court reasoned that, because many of Etsy’s vendors sell unique handmade or vintage items directly to consumers, it was not clear that any particular product purchased by plaintiffs was available elsewhere. Plaintiffs amended their complaint, but on December 14, 2023, the court granted Etsy’s motion to dismiss with leave to amend. The court again found that plaintiffs had failed to plausibly allege that Etsy’s prices were higher, that the higher prices were attributable to the carbon offsetting claims, or that plaintiffs purchased the products through Etsy because of the offsetting claims. Plaintiffs filed a second amended complaint on January 16, 2024, but subsequently filed a notice of voluntary dismissal on January 22, 2024.
Significance: This case was one of the first alleging a company relying on offsets should have known the benefit of the offsets was overcalculated. As scrutiny of the voluntary carbon markets heightens, companies relying on them to make sustainability claims must ensure that offset projects they purchase from are properly diligenced and that the company’s claims do not overstate the effect of the offsets. Separately, this case and the lululemon case suggest that focusing on plaintiff’s price premium may be a useful shield against carbon-related false advertising suits. It may be a particularly effective strategy for third-party marketplaces, like Etsy, or when the alleged misrepresentations are not related to the products purchased by the plaintiff.
5. Berrin v. Delta Airlines, Inc., No. 2:23-cv-04150-MEMF-MRW (C.D. Cal. 2023)
Claims: Putative consumer class action alleging Delta’s carbon neutrality claim, which relied on carbon offsets, was misleading. Plaintiffs alleged that offsets cannot make a company “carbon neutral.”
Status: Ongoing. In the first motion to dismiss, the court held that plaintiffs adequately alleged that vendors of voluntary carbon offsets based their certifications on fraudulent projections of carbon reduction, and that Delta either knew or should have known that the certifications were not accurate. The court also held that plaintiff’s claims were not preempted by the Airline Deregulation Act. The court denied Delta’s motion to dismiss the second amended complaint, holding that plaintiff had standing to seek injunctive relief under the California consumer protection statutes. On December 19, 2024, plaintiffs filed a third amended complaint to name an additional class representative. Delta answered the complaint on January 27, 2025.
Significance: As scrutiny of voluntary carbon offsets intensifies, companies relying on them to make carbon neutral claims face ever-heightened exposure to consumer suits for misleading marketing. Companies wishing to include carbon offsets as part of their sustainability and climate mitigation portfolio must be sure to diligence the integrity of the offsets, the methodologies used to verify and validate them, and the projects generating the carbon benefits.
6. Long v. Koninklijke Luchtvaart Maatschappij, N.V., No. 3:23-cv-00435 (E.D. Va. 2023) and Dukus v. Koninklijke Luchtvaart Maatschappij, N.V., No. 1:22-cv-07962 (S.D.N.Y. 2022)
Claims: Putative consumer class actions against operator of KLM Royal Dutch Airlines for allegedly misleading consumers about efforts to limit the effects of climate change. Plaintiffs contended that KLM’s carbon offset program misled customers to believe that offsets could truly compensate for the impact of flying, when they cannot, causing Plaintiffs to pay a premium for their flight.
Status: The court in Long granted a motion to dismiss on August 26, 2024, on the basis that the suit was preempted by the Airline Deregulation Action and the case is closed. Dukus was dismissed on September 12, 2023, as the court determined that the plaintiff had booked her flight through a third-party service that only provides airline information after purchase, and therefore she could not have relied on representations made by KLM.
Significance: These cases were among the first carbon-related false advertising cases and represent the initial target for this litigation, i.e., companies in industries known to have high carbon impacts that plaintiffs perceived would face an uphill battle substantiating carbon-neutral claims. At the motion-to-dismiss stage, however, plaintiffs tended to struggle with standing issues but, in more recent cases, drawing on lessons from the airline litigation, have become more adept at pleading standing. Nonetheless, standing—specifically reliance and injury—continues to be a first line of defense for companies facing false advertising suits.
7. Dorris v. Danone Waters of Am., No. 7:22-cv-08717 (S.D.N.Y. 2022)
Claims: Putative consumer class action alleging that Danone’s product label claims that the Evian water bottles were “carbon neutral” were false and misleading. Plaintiffs alleged that reasonable customers reviewing the product’s packaging would believe that the product manufacturing is sustainable and leaves no carbon footprint.
Status: Dismissed. A motion to dismiss was granted in part on January 10, 2024, with leave to amend. The court concluded that it could not determine as a matter of law that the term “carbon neutral” did not have the capacity to mislead. The court further found that that “carbon neutral” was the type of “general environmental benefit claim” that the Federal Trade Commission’s Green Guides warn against and that Danone “expects too much” from consumers when it directs them beyond the label to websites to learn what “carbon neutral” means. On November 14, 2024, the court granted Danone’s motion to reconsider and dismissed the remainder of Plaintiffs’ claims, with leave to amend. Danone had argued that the court failed to follow precedential case law that held that, if a front label was “ambiguous,” a reasonable consumer would be expected to review the product’s back label and other available information to learn more about the representation.
Plaintiffs were given the opportunity to file an amended complaint by December 13, 2024. They did not do so, and their claims were dismissed with prejudice.
Significance: This case is significant because the court did not find plaintiffs’ assertion persuasive that reasonable consumers would understand “carbon neutral” to mean that the product was not associated with any carbon dioxide emissions. While “carbon neutral” claims may be false and misleading, it is unlikely that courts will consider them to be per se misleading. However, businesses should be careful to adequately substantiate their “carbon neutral” claims and to make qualifying information and substantiating disclosures obvious to consumers.
Securities Litigation and Investigations
Specific Case Examples
1. Porter v. GrafTech International Ltd. et al., No. 1:24-cv-00154 (N.D. Ohio 2024)
Claims: Securities class action alleging that GrafTech misled investors by making environmental sustainability claims associated with the decarbonization of steel, all while leadership failed to implement the claimed environmental safeguards. Plaintiff alleges that he and the putative class were injured by the decline in the market value of GrafTech once these misrepresentations were made public.
Status: Ongoing. GrafTech moved to dismiss on the basis that the alleged representations were now false when made and that plaintiff failed to make particularized allegations of scienter. Motion-to-dismiss briefing concluded on March 17, 2025, but the court has yet to issue a ruling.
Significance: Misalignment between claims about a company’s environmental achievements and actual implementation can invite increased scrutiny and derivative suits by sustainability-minded shareholders.
2. Lyall v. Elsevier Inc. et al., No. 1:24-cv-12022 (D. Mass. 2024)
Claims: Putative class action alleging that Elsevier misled investors by making net-zero and other climate‑related claims while privately supporting the fossil fuel industry. Plaintiff alleges that this artificially inflates the value of Elsevier’s stock, in violation of federal securities laws.
Status: Ongoing. Elsevier moved to dismiss on the basis that plaintiff has failed to adequately plead materially misleading statements, that plaintiff’s loss causation theories are conclusory, and more. On April 28, 2025, plaintiff sought leave to file an amended complaint. That motion is pending.
Significance: One issue before the court is whether abstract climate goals, rather than affirmative representations about environmental achievements, are enough to support securities litigation.
3. Fagen v. Enviva, Inc., No. 8:22-cv-02844 (D. Md. 2022)
Claims: Securities class action alleging that Enviva’s statements regarding its environmental sustainability were allegedly false and misleading. Plaintiffs alleged that Enviva misrepresented the environmental sustainability of its wood pellet production and procurement to investors.
Status: Closed. A motion to dismiss was granted on July 3, 2024, finding that plaintiffs failed to allege a material misrepresentation or scienter (i.e., that defendants acted with intentional or reckless deception) regarding their ESG-related representations. Plaintiffs voluntarily dismissed the case on July 25, 2024.
Significance: Scienter, when combined with the heightened pleading standard for fraud claims, can set a high threshold for plaintiffs bringing securities claims based on aspirational sustainability goals.
4. Dwyer v. Allbirds, Inc., 7:21-cv-05238 (S.D.N.Y. 2021)
Claims: Securities class action alleging that Allbirds misled customers on the climate impact of its wool shoes. Plaintiffs alleged that Allbirds’ use of the Higg Material Sustainability Index (MSI) calculations to calculate the carbon footprint of its shoes produced misleading information because the Higg MSI calculations only accounted for just over half of wool’s total impact.
Status: Closed. A motion to dismiss was granted on April 18, 2022, finding that plaintiff failed to allege that the methodology used by Allbirds was materially misleading because Allbirds disclosed the scope of its calculations, and the clerk entered a judgment against plaintiff, closing the case on April 21, 2022.
Significance: Disclosing methodology or rationale behind a company’s climate claims may protect the company from securities litigation based on those same claims.
5. In re Oatly Group AB Securities Litigation, No. 1:21-cv-6360 (S.D.N.Y. 2021)
Claims: Securities class action alleging that Oatly overstated the sustainability attributes of its product. Plaintiffs alleged that Oatly made materially false and misleading representations, artificially inflated prices, and caused the shareholders to suffer losses when the alleged misrepresentations and fraudulent conduct were revealed.
Status: Closed. The court approved a class action settlement on July 17, 2024, for $9.5 million, but the claims included multiple alleged misrepresentations unrelated to carbon or climate. Plaintiffs dropped the greenwashing allegations in their third amended complaint following the court’s instruction to avoid “inactionable statements of opinion and mere puffery.” The settlement involved plaintiffs’ allegations that the Offering Documents for Oatly’s initial public offering represented that the company had substantially expanded production in response to increasing consumer demand but failed to disclose declining retail market share in key markets, as well as production issues and cost increases for raw materials, rendering the documents misleading.
Significance: In 2022, following the initiation of this lawsuit, Oatly’s advertising campaign in the UK was banned due to what were deemed by the Advertising Standards Authority (ASA) to be misleading environmental claims. The ASA investigation was in response to 109 complaints from consumers challenging whether Oatly could substantiate its claims. Taken together, the suit reflects the broader trend of heightened shareholder scrutiny around climate claims, and the potential legal and business exposure associated with overstating environmental benefit.
6. Ramirez v. Exxon Mobil Corporation et al., No. 3:16-cv-3111 (N.D. Tex. 2016)
Claims: Securities class action alleging that Exxon’s public statements were materially false and misleading. Plaintiffs alleged that Exxon failed to disclose internal reports that recognized the environmental risks caused by climate change and employed an inaccurate carbon price in evaluating the value of certain future oil and gas prospects.
Status: Ongoing. A motion to dismiss was denied on August 14, 2018, finding that Exxon officials made material misstatements concerning the company’s use of proxy costs for carbon in business and investment decisions, and the court denied a motion for reconsideration. The court granted in part and denied in part a motion for class certification on August 21, 2023, but the certification was limited to failure to properly account for and disclose losses related to certain mining operations, not carbon pricing. Exxon recently filed a motion for summary judgment and briefing concluded on March 28, 2025. Exxon argues the claims must fail for lack of scienter and because there is no dispute as to the accuracy of Exxon’s public disclosures. The court has yet to issue a decision.
Significance: The only claims that have survived the pleading stage and class certification relate to failure to properly account for and disclose losses related to bitumen and dry gas operations, rather than any greenwashing theories or misrepresentations about environmental claims.
Federal Agency Enforcement and Congressional Investigations
Federal Enforcement
1. Multi-Agency Enforcement Against Fraudulent Carbon Offset Scheme
In October 2024, the FTC, CFTC, SEC, and DOJ announced parallel actions against CQC Impact Investors LLC, a leading global developer of voluntary carbon credit projects, and two of its former executives for a scheme to fraudulently generate approximately six million carbon offsets. The agencies allege that CQC and its executives submitted false and misleading information to carbon credit registries and third-party reviewers, resulting in the issuance of millions more carbon credits than it was entitled to receive. CQC paid a $1 million fine and agreed to invalidate all fraudulent offsets. The executives were also criminally indicted in relation to their activities at CQC for wire fraud conspiracy and commodities fraud conspiracy, while one of the two was additionally charged with securities fraud conspiracy.
This enforcement action marks the first federal fraud charge brought in relation to the issuance and sale of voluntary carbon offsets. It signals a shift towards stricter regulatory scrutiny of carbon credit markets and comes alongside the CFTC’s newly approved guidance on carbon credit derivatives listing procedures. While these agency actions demonstrate the broad legal exposure faced by those operating in voluntary carbon markets, such actions may also help to address public concern over the integrity and climate impacts of voluntary carbon offsets. Increased federal enforcement will help ensure the validity of carbon credit projects and maintain market credibility by requiring project developers, registries, and marketplaces to prioritize transparency, data verification, and ethical practices. Meanwhile, as they continue to pursue net-zero and decarbonization initiatives, companies are likely to face increased scrutiny over the purchase and use of carbon offsets or investments in carbon projects. Though enforcement actions related to climate investments are expected to continue, it is unclear what such enforcement might look like in light of changing federal priorities and the withdrawal of the SEC’s climate disclosure rules.
Congressional Investigations
1. House Judiciary Committee: “Climate Control: Exposing the Decarbonization Collusion in Environmental, Social, and Governance (ESG) Investing”
On June 11, 2024, the Republican-led House Judiciary Committee released a “Climate Control” report, summarizing the committee’s two-year investigation into an alleged “climate cartel” consisting of “left-wing activists and major financial institutions” that “collude to impose radical environmental, social, and governance goals on American companies.” The report scrutinizes the coordinated efforts of large asset managers, activist coalitions, and international organizations to promote decarbonization and ESG activities using tactics such as shareholder resolutions and board of director votes. The report raises concerns that these coordinated efforts stifle competition, violate the fiduciary duties of asset managers, and limit consumer choice by manipulating markets and driving up costs across the energy, aviation, and agriculture industries.
The report concludes that existing antitrust laws may not be sufficient to deter this alleged anticompetitive collusion and calls for stronger enforcement measures. In the accompanying press release, the Committee stated its intent to continue examining whether existing civil and criminal penalties and current antitrust law enforcement efforts are sufficient to deter “anticompetitive collusion to promote ESG-related goals.” The statement signals a political intention to both use existing federal antitrust authority to oppose ESG investing and promote legislative changes to expand such authority. This builds on the prior warnings of Republican senators, who in 2022 sent a letter to 51 U.S. law firms emphasizing the antitrust risk incurred by companies pursuing ESG initiatives.
Meanwhile, as described in more detail below, state AGs have taken the lead on enforcing both state and federal antitrust law. A 2023 letter by 21 Republican state AGs to the signatories of the Net Zero Financial Services Provider Alliance (NZFSPA) alleged that the signatories may be violating federal and state antitrust law, and included extensive requests for information. In 2024, coalitions of state AGs brought antitrust lawsuits against asset managers and truck manufacturers for their participation in joint climate commitments.
Significance: The House Committee’s activities place private companies across sectors under increased scrutiny regarding their involvement in decarbonization initiatives and ESG coalitions. The report suggests that asset managers and investors should be particularly cautious about promoting ESG strategies that could be perceived as anticompetitive or market-manipulating. Companies making climate-related commitments are free to act independently but must exercise caution not to enter into agreements that have a potential to impact industry competition.
2. House Judiciary Committee: “Sustainability Shakedown: How a Climate Cartel of Money Managers Colluded to Take over the Board of America’s Largest Energy Company”
On December 13, 2024, the Republican-led House Judiciary Committee released the “Sustainability Shakedown” report. This interim report found that “a cartel” of financial firms and climate activists sought to replace Exxon Mobil Corp. board members in 2021 after the company declined to make a series of climate pledges. The report claims the “cartel,” comprising major financial institutions and climate activist groups, used its influence and coordinated actions to pressure ExxonMobil.
Activists branded ExxonMobil as a “focus company” and launched organized shareholder “engagement” campaigns calling for the company to make climate commitments crafted to reduce energy production. In early 2020, the group of activist investors received millions of dollars from funders of Climate Action 100+ to launch a campaign to remove and replace the company’s board members. The report claims that investment groups BlackRock, Vanguard, and State Street were strong-armed into supporting the campaign through coordinated threats from clients who said they would pull multibillion-dollar contracts if the investors refused to join the initiative. The same investment groups were subsequently sued by a coalition of states, led by the Texas AG.
Significance: The report suggests that the cartel’s coordinated actions may have violated federal antitrust laws by engaging in collusion and collaborative engagement. This assessment foreshadows increased scrutiny about the influence of climate activists and financial institutions on corporate decision-making and the use of shareholder power to push specific agendas. Companies, especially in energy and related sectors, can still expect pressure from investors to adopt specific climate goals.
State AG Actions
Specific Case Examples
1. State of Maine v. BP p.l.c., et al. (Me. Super. Ct. 2024), No. 2:25-cv-00001-NT (D. Me. 2025)
Claims: Maine asserts claims for negligence, public and private nuisance, trespass, statutory nuisance, and violation of the Maine Unfair Trade Practices Act against all defendants, failure to warn against the fossil fuel company defendants, and civil aiding and abetting against the American Petroleum Institute. Maine alleges that the fossil fuel companies are responsible for climate change, affirmatively obscured evidence of that fact, purposefully slowed the development of alternative energy sources and knowingly exacerbated the costs of responding to climate change and continue to mislead Maine consumers by engaging in greenwashing campaigns that portray themselves as climate-friendly companies.
Status: Ongoing. Maine filed its complaint on November 26, 2024, defendants removed the case to the U.S. District Court for the District of Maine on January 3, 2025, and Maine filed a motion to remand to state court on February 18, 2025.
Significance: This case is the latest in a line of similar lawsuits filed by state and local governments against fossil fuel companies that include greenwashing allegations alongside damages claims for the companies’ contributions to climate change. Fossil fuel companies have lodged numerous challenges arguing that state law climate change claims are preempted by the Clean Air Act. Thus far, and as recently as January 13, 2025, the Supreme Court has refused to hear such challenges.
2. City of New York v. Exxon Mobil Corp. et al., No. 451071/2021 (N.Y. Sup. Ct. 2021)
Claims: New York City asserts claims for violation of New York City’s Consumer Protection Law based on allegations that fossil fuel companies misrepresent the climate impacts of specific fossil fuel products and greenwash their corporate brands by exaggerating their investments in clean energy and inflating the climate benefits of their natural gas products and investments in alternative energy sources.
Status: Motion to dismiss granted January 14, 2025, on the basis that New York City had failed to state a claim under its Consumer Protection Law because: (1) the city claimed that consumers are climate conscious and the link between fossil fuels and climate change is publicly known, but those same consumers were somehow misled by the fossil fuel companies’ failure to disclose that fact; and (2) the city had failed to allege that the fossil fuel companies’ alleged greenwashing campaigns were made in connection with the sale of a consumer good as required by the Consumer Protection Law. New York City filed a notice of appeal on February 13, 2025.
Significance: This case demonstrates the potential vulnerabilities of similar consumer protection-based greenwashing claims, given the broadly known understanding regarding the link between climate change and fossil fuels.
3. In re Fuel Industry Climate Cases, No. CJC-24-005310 (Cal. Super. Ct. 2024)
Claims: This case consolidates nine actions brought by the California AG and eight local government entities against fossil fuel companies. The various government entities all generally allege that the fossil fuel companies have misled the public about the effects of their products on climate change, including by affirmatively concealing, discrediting, and misrepresenting the existence of climate change and later by sowing doubt on the scientific consensus on that climate change is caused by human activities.
Status: Motion to dismiss for lack of personal jurisdiction denied on October 8, 2024, and motion to strike cases under California anti-SLAPP law denied on December 27, 2024. The defendants sought review of the personal jurisdiction decision, but their petition was denied on February 11, 2025. On April 7, various defendants filed demurrers to plaintiffs’ complaints.
Significance: The denial of the motion to strike under the anti-SLAPP statute is also significant, as the court ruled that the lawsuit fell under the statute’s commercial speech exemption. A number of recent cases concerning state climate change and carbon regulations have involved issues of commercial and compelled speech, and this ruling may indicate that California state courts are unlikely to side with corporations on this point.
4. People v. JBS USA Food Co. et al., No. 450682/2024 (N.Y. Sup. Ct. 2024)
Claims: Government enforcement action alleging that JBS’s net-zero by 2040 claim is misleading to consumers because JBS has no concrete plans to meet its stated goal and in fact intends to increase beef production in coming years. This same representation was subject to a National Advertising Division (NAD) claim (described below), which found that advertisements touting JBS’s net-zero goal were misleading for the same reasons.
Status: Ongoing. JBS’s motion to dismiss was granted on January 1, 2025, on personal jurisdiction grounds and permitting jurisdictional discovery. Following a stipulated extension, the New York AG has until August 31, 2025, to file an amended complaint.
Significance: This case illustrates what we expect to be a growing trend of state AGs pursuing climate-related claims against non-fossil fuel companies. This case is also significant in that it is the only instance that we are aware of in the climate space of a marketing claim being litigated in both NAD and a court, with interesting implications regarding NAD decisions potentially spurring follow-on litigation and being used as persuasive authority.
5. Texas et al. v. BlackRock, Inc. et al., No. 6:24-cv-00437 (E.D. Tex. 2024)
Claims: Government enforcement action by Republican AGs of Texas, Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, Louisiana, Oklahoma, West Virginia, and Wyoming alleging that BlackRock, Inc., State Street Corporation, and the Vanguard Group, Inc. violated state and federal antitrust laws by acquiring stock in major coal producers and pushing them to accommodate green energy goals, including by reducing coal output by more than half by 2030. The complaint specifically points to the defendants’ involvement in Climate Action 100+ and the Net Zero Asset Managers Initiative as evidence of collusion to unlawfully restrict the market for coal.
Status: Ongoing. Plaintiffs filed an amended complaint on January 16, 2025, and defendants filed a joint motion to dismiss on March 17, 2025.
Significance: This case illustrates one of several in a growing trend of Republican state AGs leveraging state and federal antitrust laws to discourage corporate climate action and growing anti-ESG sentiment more broadly to prevent collective private action to reduce GHG emissions, which we expect to continue throughout the second Trump administration.
NAD Decisions (Industry Self-Enforcement)
Specific Case Examples
1. JBS USA Food Co., Case 7135 (2023)
Claims: Claim brought before NAD, which found that advertisements touting JBS’s net-zero goal were misleading because JBS had no concrete plans to meet its climate goals. NAD concluded that the JBS’s “net‑zero by 2040” claim “conveys to reasonable consumers that JBS is already acting toward specific objectives and measurable outcomes that would enable its operations to have net-zero impact on the environment by 2040.” NAD found that JBS’s representations suggest that it was in the process of “implementing a documented plan that has been evaluated and found to have a reasonable expectation of achieving ‘net zero’ by the year 2040.” JBS, however, has no such formulated and vetted plan at present and was merely in exploratory stages with the Science-Based Targets Initiative (SBTi).
Status: Closed. NAD’s findings were affirmed on appeal, and NAD requested that JBS cease making the challenged representations.
Significance: This NAD decision is the first ruling on what constitutes acceptable representations regarding an actionable net-zero plan. While non-binding, a NAD decision strongly suggests that a company should ensure that its net-zero plan has been finalized and recognized by SBTi before making explicit claims regarding its net‑zero plan. The decision also suggests that advertisers should include qualifications regarding the challenges associated with reducing Scope 3 emissions, which are largely outside of the advertiser’s control. The later JPS litigation also demonstrates that NAD decisions can lead to follow-on litigation on similar claims.
2. Chipotle Mexican Grill, Inc., Case 7020 (2022)
Claims: NAD claim challenging Chipotle’s marketing regarding sustainability and emissions reductions, including specifically Chipotle’s following claim:
- “Reduced Carbon Emissions: From farm to foil, we’re reducing greenhouse gas emissions by optimizing our supply chain, compared to conventional ingredients.”
Looking to the FTC Green Guide’s differentiation between narrowly tailored claims and those that are overbroad, NAD found the “reduced carbon emissions” claim was overbroad because it stated it was from “farm to foil,” which implied Chipotle’s reductions started with its farming practices and continued throughout its supply chain to the customer. Chipotle’s substantiation materials related more to its farming reductions, and therefore, the NAD found this language could mislead consumers.
Status: NAD case report was issued and recommended Chipotle modify some of its marketing claims to align with what the company could substantiate, i.e., that its farming practices specifically (as opposed to its larger supply chain) reduced carbon emissions.
Significance: The NAD decision analyzed a broad swath of Chipotle’s advertisements and found some were misleading while others were not, based on the tailoring of the claims to the available substantiation. The decision underscores the importance of narrowly tailoring claims to align with substantiating data.
3. Lei Electronics Inc., Eco Alkalines Batteries, Case 5927 (2016)
Claims: NAD claim brought by a competitor against Lei Electronics, which found that advertisements touting Eco alkalines’ net-neutral climate impact were misleading. Specific claims analyzed included:
- “Eco alkalines batteries . . . reduce the CO2 and climate change impact”
- “Eco alkalines have no environmental impact”
In considering the claims, NAD looked to the FTC Green Guides that observe that “third-party certification does not eliminate a marketer’s obligation to ensure that it has substantiation for all claims reasonably communicated by the certification.” NAD found that Lei Electronics did not have competent and scientific evidence to substantiate its claims beyond the third-party certification.
NAD also found that Lei Electronics failed to properly disclose when carbon offsets and reductions that were included in their calculations of neutrality would occur. NAD noted that the Green Guides establish that an advertiser should not make a carbon offset claim unless the emission reductions “have already occurred or will occur in the immediate future.” NAD found that Lei Electronics did not provide evidence on the timing of its offsets to the NAD.
Status: NAD’s nonbinding case report was issued and recommended that Lei Electronics discontinue all carbon neutral claims, because these claims relied upon both an incomplete calculation of the company’s carbon footprint and an undisclosed third-party certification.
Significance: Companies wishing to rely on third-party certification to make climate claims should also ensure that they, or the certifier, has and makes available to consumers substantiation supporting the claims; the certification without substantiation may be insufficient to mitigate risk of misleading marketing allegations. Likewise, companies relying on offsets to make climate claims should ensure that the offset generation and retirement aligns with the timing of the claims.
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