By Marlies Hesselman*

The first week of July 2022 brought on several major developments in climate litigation in the Netherlands, with possibly significant ramifications for a new type of global climate litigation. After landmark decisions in Urgenda and Shell, plaintiffs are asking a Dutch court to weigh in on a case that forms part of a new set of pioneering climate litigation cases. This time, the case relates to greenwashing advertisements involving misleading claims on climate action by carbon majors. The new Dutch case, FossielVrij NL v. KLM, was filed by Fossielvrij NL – supported by ClientEarth and Reclame Fossielvrij – in the Amsterdam District Court on July 6, 2022, against major Dutch airline company KLM. The case follows a series of damning non-binding decisions by the Dutch national Advertising Code Commission (ACC) on similar campaigns by KLM and Shell. The ACC’s reasoning, detailed below and in the writ, will likely inform the court’s reasoning in the FossielVrij case.

This blog post introduces this novel civil lawsuit and the ACC decisions. The court case specifically addresses KLM’s so-called “fly responsibly” and “CO2ZERO” campaign, advertising that customers can fly “responsibly” by making payments to a GHG compensation scheme, and to a lesser extent, through the purchase of biofuels. The Fly Responsibly ads present the airline as “creating a more sustainable future” and as being on track to reduce its emissions to net zero by 2050.

Whilst the Dutch case is novel and the first of its kind in Dutch courts, it is not wholly unique: several advertisement cases are pending in European courts, e.g., in France and Denmark. Advertisement complaints are also pending or have been successfully decided before various national competition and advertising standards authorities, e.g., in Italy, the UK, Australia, Canada, and New Zealand.

This “splash” of misleading advertisement cases (rather than a “wave”) seems to be a fairly new phenomenon in climate litigation. As such, the plaintiffs’ arguments will be vital for bringing comparative cases in other jurisdictions. In addition, the outcome of the cases will be relevant to other companies promoting claims based on CO2 compensation schemes. In this context, the reasoning of the claimants and the ACC will offer valuable inspiration for greenwashing litigation playbooks.

The new Dutch climate case on greenwashing in KLM’s CO2ZERO campaign

On July 6, 2022, Dutch environmental organization Fossielvrij NL (FossilFree NL) announced it would take major Dutch airline company KLM to court over misleading advertisements. The suit was launched after a formal letter of summons was presented to KLM at one of its board meetings in May 2022 and unsuccessful negotiations thereafter.

Specifically, the new suit addresses KLM’s Fly Responsibly campaign, promoting the airline’s efforts towards “creating a more sustainable future” and on track to reduce its emissions to net zero by 2050, in line with KLM’s alleged commitments to the Paris Agreement goals. As part of the Fly Responsibly campaign, KLM’s “CO2ZERO campaign” offers customers the option to ‘fly responsibly’ by buying carbon offsets – labeled “CO2ZERO.” These offsets are mostly realized through reforestation projects and to a lesser extent, the purchase of “Sustainable Aviation Fuels” (SAFs). FossielVrij NL argues that CO2ZERO labels are misleading because reforestation projects funded with such offsets cannot effectively, definitely, and absolutely guarantee that the entire or even a substantial part of the footprint of a flight is “neutralized.” In short, claims of flying “CO2-neutral” or “CO2-zero” cannot be guaranteed, based on various expert reports, nor can payments in the order of three euros per tonne of CO2 offer any meaningful “limitations” or “counter effects” to the harmful effects of a flight. Similarly, the amount of “sustainable aviation fuel” that KLM purchases is negligible and cannot make a meaningful and realistic contribution to realizing CO2 neutrality and achieving the needed emissions reductions in line with the objectives of the Paris Agreement. The misleading nature of the claims lies in the contested climate benefits of various alternative fuels, their scalability for meaningful use in aviation, and KLM’s limited objective of using 10% of SAFs on its flights by 2030. SAFs’ current use is less than 1%. The plaintiffs further contend that KLM’s current Climate Action Plan wrongly supports an overall GHG reduction of 12% by 2030, based on the “well below 2⁰C” target of the Paris Agreement. That target is outdated and must be viewed as insufficient to curb dangerous global warming. KLM’s implementing strategies also fall short of even meeting this low target.

The main complaint then is that, by not being able to guarantee that CO2 emissions for a flight can be meaningfully offset, the airline wrongly creates the impression that flying “responsibly” is possible. The various schemes that customers can opt-in to do not significantly help to reduce KLM’s footprint, and certainly not in any way additional to targets that the company is already expected to achieve. Instead, the company continues to seek growth and increased flight sales (including through its Real Deal Days campaign that is tied to CO2ZERO products). It should be reducing emissions by reducing the number of flights “to keep a just, livable world within reach,” not building its “license to grow” by painting a too green and bright picture of flying. The plaintiffs argue that KLM’s misleading greenwashing marketing undermines the urgent action needed to minimize climate catastrophe.

Fossielvrij NL’s claims are supported by expert reports that concludes that KLM cannot validly claim that these kinds of schemes undo the climate effect of flying. It also refers to several other airline companies that have been critical of carbon credit schemes. The legal bases for the claim are European and Dutch consumer law, including in particular the EU Unfair Competition Practices Directive, which is also cited in a greenwashing advertising suit in France. This directive is implemented in Dutch law through Section 6:193 of the Dutch Civil Code. Under Section 6:196 of the Dutch Civil Code, the court can prohibit the making of a misleading advertisement statement and/or impose a rectification. The plaintiffs further claim, similar to earlier Urgenda and Shell cases, that KLM commits a wrongful act under Section 6:162 of the Civil Code by violating an ‘unwritten’ societal duty of care. This is the societal duty “not to mislead,” certainly when it leads to damage. This damage includes the damage of dangerous climate change for the health of present and future generations, which FossielVrij NL seeks to protect, as well as that of its direct constituents

The reasoning of the Advertisement Code Commission

The suit against KLM at the Amsterdam District Court does not come out of the blue. FossielVrij NL and Reclame Fossielvrij are two organizations that have been established primarily to ensure divestments in fossil fuels by major companies and to eradicate misleading advertisements on GHG emissions. Previously, advocacy has mainly focused on getting the ACC to rule on the misleading nature of various CO2-neutral advertisements. The ACC is the independent Dutch media watchdog that considers and issues non-binding decisions and recommendations on complaints about misleading advertising under the Advertisement Code. This is a form of self-regulation governing advertisement. Today, the ACC has addressed various claims related to climate change and CO2 emissions, particularly against Shell and KLM, of which several were successful.

In particular, on April 8, 2022, the ACC directly addressed KLM’s ‘Fly responsibly’ and CO2ZERO campaign by ruling that this campaign violated the advertising code’s provisions on misleading advertising – especially those elements referring to “climate neutrality.” Misleading slogans included: “Be a hero, fly CO2ZERO” or “CO2 neutral: KLM compensates for the CO2 emissions of your KLM Holidays flight.” The ACC noted, inter alia, that whilst reforestation programs in which KLM invests meet certain recognized theoretical standards (e.g., Gold Standard certification), there exist doubts in practice and amongst experts that emission reduction certificates purchased by KLM result in a full and permanent compensation “down to zero” in practice. The absolute environmental claims of achieving “CO2-neutrality” or “CO2ZERO” by compensating for the flight must be accompanied by ‘sound, independent, verifiable and generally recognized evidence’ that full compensation is guaranteed in practice. The commission did not see evidence for such claims.

After this first blow, environmental organizations attempted to negotiate with KLM on amendments to the campaign, but to limited avail. On June 30, 2022, their arguments for starting proper litigation were bolstered by another decision of the ACC against a very similar campaign by Shell. According to that new decision, Shell is (still) misleading its customers through the slogan “Make a difference. Compensate for CO2 emissions” – despite this slogan being amended from “Make a difference. Drive CO2-neutral.

In a first decision of the ACC, issued in August 2021, Shell’s slogan was found to be misleading because Shell could not prove that its customers could fully compensate for GHG emissions by paying 1 euro cent per liter of petrol. It agreed that the plaintiffs successfully contested the correctness of claims about CO2 compensation based on several scientific publications and climate reports from reputable bodies. At the very least, they succeeded in sowing doubts about the comparability of realized emissions and compensation measures and the measurement of the effects of these measures. According to Article 3 of the Dutch Environmental Advertisement Code, environmental claims must be demonstrably correct, which implies a heavy burden of proof for the advertiser.

In the second decision issued to Shell on June 30, 2022, the ACC still agreed with complainants that the term “compensation” suggests an “absolute environmental claim.” In their view, compensation refers to the “undoing of damage caused.” The substantiation of the claim was insufficient because “Shell has not shown that it is absolutely certain that full and lasting CO2 compensation is guaranteed through the forest projects.”

The current court case against KLM addresses slightly different claims, as the contested statements now mostly refer to “limiting your emissions,” and “compensating (part of) your flight.” The plaintiffs, however, argue that even such claims cannot be meaningfully supported by any science, and certainly not to the extent that flying with KLM suddenly becomes a positive contribution towards a more “sustainable future” or in any way “responsible” in light of meeting the Paris Agreement goals.

Early perspectives on the future of “green” advertising on CO2 emission schemes and KLM

Fossielvrij NL anticipates that its claims could have “major consequences” for other companies that “claim to nullify their climate damage with CO2 compensation projects.” Within the Netherlands, this new court case, as well as the ACC’s decisions on the credibility of companies’ claims towards climate neutrality by 2030 or 2050, especially through CO2 compensation schemes, would allow for further complaints at both the ACC and in courts against other advertisements that push similar claims. The decisions and the new case will also likely spur further debate about the promises of CO2 neutrality made through CO2 compensation schemes or how such schemes can be marketed as part of companies’ efforts to be or look “green.” An even larger question raised by plaintiffs’ claims is whether companies can reasonably present any claims about their companies promoting “responsible or sustainable driving or flying based on carbon offsetting schemes” when, ultimately, overall reductions and elimination of fossil fuel use will be necessary to effectively attain the goals of the Paris Agreement.

The new “greenwashing advertisement” court case FossielVrij NL v. KLM is likely to represent an exciting, promising new frontier of climate litigation in Dutch courts. The case could lead to a binding court decision on greenwashing, rather than a non-binding decision of the ACC, which may be poorly implemented. At the same time, FossielVrij NL v. KLM is likely to be just one of the legal developments placing pressure on KLM in the coming years: KLM is also identified by the organization Milieudefensie as one of 29 possible targets for further litigation based on the landmark judgment of the Hague District Court in Milieudefensie v. Shell in May 2021 – a rights-based climate case against the carbon major Shell. In an update on their litigation strategy, Milieudefensie announced last week that it will be reviewing the performance and climate plans of these companies and financial institutions and begin with preliminary legal investigations but will likely not start any litigation soon.

It can thus be expected that in the coming years, the Netherlands will prove fertile ground for further ground-breaking climate litigation along different lines of legal reasoning. The KLM greenwashing case will be amongst those with a potentially significant impact on litigation globally.

 

* This blog post is part of the Sabin Center’s Peer Review Network of Global Climate Litigation and was edited by Maria Antonia Tigre. Marlies Hesselman is a lecturer in Public International Law at the University of Groningen in the Netherlands, and is the national rapporteur for the Netherlands and the UN Special Procedures in the Peer Review Network.

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