KLM Judgment: The intensifying scrutiny of corporate greenwashing across Europe

In what has been described as a seminal greenwashing judgment, on 20 March 2024, the District Court of Amsterdam found the Dutch national airline KLM’s environmental claims in its advertising were misleading, and therefore illegal, under EU consumer law.

What is greenwashing?

As set out in a previous Leigh Day blog post, greenwashing is essentially the practice of making exaggerated, misleading or unsubstantiated statements about the positive environmental impact of a company, service, or product.

KLM’s Advertising Campaign

The claim concerns 19 environmental statements that KLM made as part of various campaigns, including: (a) The “Fly Responsibly” campaign, which it launched in December 2021; (b) the “CO2ZERO” product, whereby customers can pay extra to offset the emissions from their flight; and (c) the marketing surrounding the “KLM Real Deal Days”, a discount promotion encouraging people to buy discount flights over certain periods.

Advertising from the “Fly Responsibly” campaign included “Be a hero, fly CO2ZERO”, and “CO2 neutral”, as well as a poster on a billboard at Amsterdam’s Schiphol Airport depicting a child sitting on a swing, with the statement: “Join us in creating a more sustainable future”.

The Proceedings

In April 2023, proceedings were issued against KLM in the District Court of Amsterdam by the campaign group Fossielvrij NL (Fossil Free Netherlands).

Fossil Free’s case alleged that, in making the 19 statements:

1. KLM used the term sustainable while its products were far from sustainable;
2. KLM claimed it was tackling climate change when in fact it was committed to aviation growth. None of the measures KLM was betting on outweighed that growth;
3. KLM offered carbon offsetting initiative products which did not validly offset or reduce the climate impact of flying.

Fossil Free sought an order that these 19 statements were misleading and unlawful under the Unfair Commercial Practices Directive (the applicable EU consumer protection law directed at regulating unfair business practices). They also wanted the court to ban KLM’s statements and advertisements with similar text from public disclosure, and order KLM to rectify them.

Judgment

On 20 March 2024, the court ruled that 15 of KLM’s 19 statements targeted by the lawsuit were misleading and unlawful.

The statements found to be misleading included KLM’s claim that it was “committed to the Paris Agreement climate goals.”

Meanwhile, the Court found the statement on the billboard advertisement at Schiphol Airport to be misleading as it did not explain how flying with KLM provided any environmental benefit. It held that the impression was reinforced by the background of sky, mountain and water.

Regarding ‘compensation’ measures, such as sustainable aviation fuels and tree-planting, the court found that KLM had painted an “overly rosy picture” as these measures have a minimal impact on mitigating the negative environmental aspects and mislead people into thinking that flying with KLM is sustainable.

The court did not impose a punishment on KLM, order KLM to amend the statements, or warn consumers that today’s aviation is not sustainable. However, it did rule that if the airline makes environmental claims in the future, it must do so “honestly and concretely.”

European landscape

The ruling is the latest development in litigation, legislation and regulatory regimes combatting greenwashing in Europe.

In April 2023, a German court found French energy giant TotalEnergies’ claim regarding ‘climate neutral’ and ‘CO2 compensated’ heating oil to be unlawful. In a similar veil, in February 2023, a Swedish Court ruled against European dairy company Arla for its claim of ‘net zero carbon milk.’

Meanwhile, 17 airlines are currently the subject of a regulatory complaint to the EU’s executive arm, the European Commission, regarding allegedly misleading climate-related claims relating to offsetting schemes and sustainable aviation fuels.

An EU amendment to consumer law is coming into force in the next few weeks that will ban the making of claims that a product has a neutral, reduced, or positive impact on the environment in terms of greenhouse gas emissions based on the offsetting of emissions. This is a welcome development, as claims such as ‘climate neutral’, ‘CO2 neutral certified’, ‘carbon positive’, and ‘climate net zero’ are known to be misleading to consumers. Such claims relate to the company purchasing carbon credits to draw out an equivalent level of carbon from the atmosphere as that generated by the product or supply and production of that product.

In the UK, similar claims made by British Airways and by Virgin are the subject of an ongoing complaint filed by Leigh Day on behalf of the climate campaign group Possible. The complaint alleges that claims made by each of the airlines in relation to their pathways to carbon neutrality and in relation to so-called “sustainable" aviation fuels are misleading in breach of the OECD Guidelines for Multinational Enterprises.

Impact to corporations in the UK

The KLM ruling sets an international precedent for all companies promoting their commitment to the Paris Agreement. Although the Dutch Court’s findings are not directly applicable in the UK, the judgment provides a useful reference point for greenwashing actions in the UK, not least as UK consumer protection law (including the Consumer Protection from Unfair Trading Regulations 2008) is derived from the same EU legislation.

In an environment where surveys indicate that consumers want harsher penalties for businesses caught greenwashing, it is important that companies are honest in their communications regarding the carbon emissions of the products or services. The KLM case highlights that carbon-intensive companies seeking to greenwash the impact of their operations during the climate crisis are – quite rightly - facing increased scrutiny and will be held accountable where claims are misleading.