Welcoming Greenwashing Claims to South African Shores

Introduction

There has been a significant increase in global climate-washing and green-washing cases against companies in the past few years. Given this, it was to be suspected that South African dispute resolution bodies and regulators would soon be tasked with considering challenges of this nature.

Climate-washing or green-washing can be defined as inaccurate, misleading, or misrepresented narratives (in public statements, document or advertisements) regarding the environmental benefit, ‘friendliness’ or sustainability of products, services or business operations. These inaccurate, misleading or misrepresented narratives can manifest in various ways such as:

• Claims by companies to reduce greenhouse gas emissions without a credible transition plan in place;
• Vague or non-specific statements about operations, materials and the environmental benefit or impact thereof;
• The use of misleading labels for products or services such as “green”, “eco-friendly” or “nature-friendly”; and
• Emphasising one environmental attribute while ignoring other impacts that a product or service may have.

Cases challenging narratives implemented by companies in this regard have garnered much global attention over the past few years, with, for example, the release of key decisions in the United Kingdom, the Netherlands and Australia against (but certainly not limited to) airlines for the misleading of customers about the environmental impact of air travel. To date, more than 140 cases of this nature have been filed globally and of those that have been officially decided, there is an estimated 70% success rate for claimants[1].

Greenwashing complaint against Total Energies

The anticipated onset of similar challenges to narratives and statements by companies in South Africa came to pass in the earlier months of 2024, when the Fossil Ad Ban campaign of Fossil Free South Africa lodged a complaint with the Advertising Regulatory Board (“ARB”) regarding statements made by TotalEnergies Marketing South Africa Proprietary Limited (“TotalEnergies”).

The complaint pertained to an announcement made by TotalEnergies regarding its ongoing partnership with SANParks, in which TotalEnergies iterated its commitment to “sustainable development” and “environmental protection“.

Fossil Ad Ban challenged this statement on the basis that it “was a completely false and misleading claim” and constituted green-washing by TotalEnergies in breach of the ARB’s Code of Advertising Practice (“the Code”). In fortifying this argument, Fossil Ad Ban referred to TotalEnergies’ contribution to climate change through greenhouse gas emissions, ongoing oil and gas exploration across Africa, and its interest in the East African Crude Oil Pipeline Project and the adverse environmental impacts thereof.

In response to the complaint, TotalEnergies raised the following defences:

• The ARB does not have jurisdiction over TotalEnergies as it is not a member, and does not submit to the jurisdiction;
• The content challenged was a corporate communication and not an advertisement that promoted a product or service, and therefore it should not be subject to review by the ARB; and
• The content is not false or misleading, given that the commitment to sustainable development and environmental protection is grounded in the company’s strategy and policies, and the company’s approach to sustainable development and climate change.

In a ruling published on 14 August 2024, the ARB upheld part of the complaint in favour of Fossil Ad Ban. A copy of the Ruling is accessible here.

In summary of the ruling:

• Insofar as jurisdiction is concerned, the ARB accepted that TotalEnergies was not a member, but stated that in terms of clause 3.3 of the Memorandum of Incorporation of the ARB, it could issue a binding ruling on its members (including broadcasters and media) to refuse advertisements or withdraw same from publication;
• In respect of the nature of the content, and with specific regard to the definition of “Advertising” in the Code, the ARB ruled that the content was a form of communication in promotion of products and TotalEnergies’ business, and therefore did constitute “Advertising”;
• Turning to the merits of the complaint, the ARB considered the purpose of the challenged content, namely to communicate the continued partnership between TotalEnergies and SANParks. Against this consideration, the ARB established that the key question to be answered in the ruling was whether TotalEnergies’ partnership with SANParks is indicative of a commitment to “sustainable development” and “environmental protection” respectively.
• In dealing with the commitment to “environmental protection” the ARB made reference to the longstanding partnership between TotalEnergies and SANParks and the positive work done in safeguarding and promoting South Africa’s natural heritage. For this reason, the ARB held that this portion of the content was not in breach of the Code.
• In ruling on the commitment to “sustainable development”, the ARB accepted that TotalEnergies is engaged in certain projects that were directed at sustainable development, however, it was ruled that the core of the business is directly opposed to sustainable development given its “ongoing exploitation of fossil fuel”, and that there was no evidence of a link between its support of SANParks and sustainable development. For these reasons, this portion of the content was found to be in breach of the Code.

On this basis, the ARB has instructed its members in the ruling to not accept any advertising from TotalEnergies with the wording “committed to sustainable development”, relating to its support of SANParks.

Concluding thoughts

While the ruling by the ARB is limited in its application, it is a novel development in South Africa and serves as a clear caution to companies to reconsider and revisit their advertising strategies and the nature of public statements, communications and narratives pertaining to the environmental benefit or impact of products, services and the business operations as a whole.

There is a heightened global awareness and quick-developing local awareness of the implications of climate-change, the need for transition in line with global commitments, the transition policies and strategies put in place by companies, and the mechanisms through which to hold companies accountable for inter alia:

• Misalignment between what they say they will do and what they do; and
• Misleading narratives and misrepresentations linked to climate change and environmental benefits of products and services.

Liability insurers of companies are also advised to take note of the ruling, the potential implications (for similar and further challenges), and to track similar litigation trends that may arise for their policyholders.

Amelia Costa and   Celeste Du toit –Clyde & Co LLP –