A landmark decision has been handed down in the first ever greenwashing claim brought against an aviation giant.
In 2022, Dutch campaigners Fossielvrij Netherlands and Reclame Fossielvrij filed a lawsuit against KLM, arguing that KLM's advertising was misleading and overstated KLM's commitment to tackling climate change. The case was largely centred around KLM's 'Fly Responsibly' campaign, which the airline has described as an 'awareness campaign'. However, activists have argued that this is misleading given that all flights today contribute significant amounts of greenhouse gas emissions.
The case also challenged KLM's carbon offsetting marketing, which suggested that customers could reduce their flight's impact by supporting certain offsetting projects or products.
In a ground-breaking decision, the District Court of Amsterdam has found that KLM was in fact acting unlawfully by using misleading advertising and by making claims that it was committed to the Paris Agreement climate goals. The Court stated that: "Those measures only marginally lessen environmental impacts and give the wrong impression that flying with KLM is sustainable."
KLM has acknowledged the Court's decision, stating:
“Our communication about sustainability must be honest and transparent.”
“We are pleased that the court has ruled that we can continue to communicate with our customers and partners about our approach to making aviation more sustainable. We are continuously learning how best to include them in this.”
The airline is also considering its next steps following the ruling. The District Court of Amsterdam is a first instance court; therefore, KLM could seek to appeal the decision.
The decision has sparked some debate in the aviation industry as many airlines have committed to reaching net zero by 2050, but the availability and cost of the cleaner fuels makes this a particularly challenging goal. Some European airlines have said the region's climate rules are making it harder to remain competitive against some of their global rivals and have called on governments to do more to assist with decarbonising the industry. Others, such as British Airways, are calling for a more balanced set of rules and policies that enable a transition to cleaner energy without being to the detriment of the industry's competitiveness globally.
The impact of this decision is likely to be far-reaching in a fossil-fuel dependent industry like aviation. It also sends a wake-up call to large companies worldwide. Not only could a company be dragged through the courts, suffer reputational damage and lose valuable resources to fighting its claim, but it might have to pay the claimant's costs as KLM had to. KLM also retracted the advertising, without being ordered to do so, which indicates the emphasis placed by such companies on public perception and reputation.
However, is such a decision enough to stem the tidal wave of misleading climate information and begin a tsunami of greenwashing litigation instead? Well, perhaps - the issues raised within KLM's lawsuit have already been employed by the European umbrella consumer organisation BEUC in an EU-wide regulatory complaint condemning misleading sustainability claims made by 17 European airlines. It is with bated breath we wait to see if (or when) the Courts of England and Wales follow suit.
This article has been co-written by Sanchita Agrawal (Solicitor) and Kerry Price (Trainee Solicitor).
In our Navigating Risk Horizons report, the Dispute Resolution team at Howard Kennedy identified key risks threatening business resilience in 2024 as well as practical steps that leaders can take to manage those risks and maximise opportunities to strengthen their business. Within the report we consider the impact of greenwashing litigation and stakeholder activism as well as the growth in ESG regulation.
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