An Update in "Greenwashing" Developments

• Pages: 48-49
• Date: 01 January 2025
• Author: Robert Jacques

Insurance Coverage Litigation

Vol. 33 No. 3

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Published in Coverage Vol. 34 No. 1, Copyright © 2025, American Bar Association. All rights reserved. This information or

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An Update in "Greenwashing" Developments

By Robert Jacques

In headlines, controversies continue concerning company assertions about ESG-related

initiatives, as well as recent state and federal regulatory efforts related to those claims.

While often framed as a novel risk, “greenwashing” has been a subject of scrutiny for many

years, with the FTC targeting “environmental marketing” claims since at least the 1990s.

See FTC, Cases Tagged with Environmental Marketing Cases Tagged with Environmental

Marketing; see also, e.g., Prepared Statement of the FTC, “It’s Too Easy Being Green:

Defining Fair Green Marketing Principles” (June 9, 2009). And rather than a purely

domestic issue, greenwashing has taken an international dimension, with the United Nations

elaborating on “greenwashing” practices globally, UN, Greenwashing – The Deceptive

Tactics Behind Environmental Claims, as well as the EU proposing and passing

Regulations and Directives providing more guidance on the topic, such as the Directive to

Empower Consumers for the Green Transition and the Green Claims Directive.

Domestic and global insurers, in turn, face exposure to their own policyholders’ costs and

liabilities for ESG-related claims. See, e.g., Kennedys, Legal Focus: Greenwashing is a

Growing Risk for Insurers (July 19, 2023). Particularly, such claims are an acute risk for

companies in the food, drug, and cosmetic space, given their sale of products that consumers

ingest or apply to themselves. See, e.g., FTC Press Release, Truly Organic? The FTC Says

No (Sept. 19, 2019); U.S. FDA, Key Legal Concepts for Cosmetics Industry. From resource

procurement, to farming and manufacturing, to shipping logistics, to marketing, to

regulatory compliance, the life cycle of a product can be complex and full of pitfalls, simply

from how companies describe that cycle to the public.

As a recent example of regulatory efforts, the U.S. Department of Agriculture has

announced guidelines to “strengthen the documentation that supports animal-raising or

environment-related claims on meat or poultry product labeling.” USDA Press Release No.

0164.24Those guidelines identify examples of agricultural greenwashing, including claims

related to animal welfare, breeds, diet, living or raising conditions, negative antibiotic or

hormone use, source and traceability, and organic compliance. FSIS Guideline on

Substantiating Animal-Raising or Environment-Related Labeling Claims, FSIS-GD-2024-

0006 (Aug. 2024) And while such claims may be vetted as part of a regulatory review

process, or further verified by inspectors, the agency encourages third-party certification

initiatives to avoid the reputational harm from greenwashing allegations and to prevent

consumer harm.

Given the influx of controversies, claims, and regulatory efforts, companies should ensure

that their risk management and insurance programs are aligned to thoughtfully meet those

risks—particularly, insurance with personal and advertising injury (CGL), management

liability (D&O), product-recall, and even cyber/media-liability coverages. As part of that