THE ESG CATCH-22
‘Greenwashing’, ‘bluewashing’ and ‘ESG’. These terms are increasingly at the heart of a new wave of litigation in the US as companies face pressure from consumers and investors to improve and report on their environmental, social and governance (ESG) practices – all while plaintiffs’ lawyers look for opportunities to challenge every disclosure and representation.
Recent cases have shown that consumer and advocacy groups are aggressively targeting companies for their ESG statements and representations. This makes ESG marketing and disclosures particularly high risk, even for companies just trying to promote the good work they are doing.
This article discusses recent trends in ESG litigation in the US and tips for mitigating that risk in a rapidly changing legal environment.
Lawsuits focused on recycling labels are proliferating
Recycling-related labels have recently come under a microscope. We have seen a number of lawsuits challenging these labels in recent years. While there is no ‘one size fits all’ recycling lawsuit, these lawsuits usually rely on one of two theories.
The first line of cases argues that labels promoting recycling are misleading because the products may not actually be recycled due to municipal recycling capabilities. While these cases are still in the early stages of litigation, courts have generally rejected these lawsuits because the promotion of recycling or the labelling of a product as ‘recyclable’ is not a promise that the product will actually be recycled, but instead a representation that it is capable of being be recycled.
Jul-Sep 2023 issue
Gibson, Dunn & Crutcher LLP