California and state Attorney General Rob Bonta have settled with SoCalGas for making misleading claims that natural gas is renewable.
The company promoted natural gas, a known fossil fuel, as a renewable energy source in a wide range of its marketing materials, including print, electronic media, informative displays, backdrops, and promotional items. Allegations that SoCalGas violated California’s consumer protection laws, including the Unfair Competition Law and the False Advertising Law, were resolved in the settlement.
For violating these laws, the company will be prohibited from making any kind of similar unqualified statement about natural gas being “renewable.” Further, they will have to pay $175,000 in penalties, half of which will be given to the California EPA’s Small Grants Program. Finally, SoCalGas must publish a corrective statement on its website within 14 days of the settlement.
Increased Corporate Accountability for Misleading Environmental Statements
The recent settlement follows a trend of holding corporations accountable for false or ambiguous sustainability statements, especially customer-facing claims. As more companies make net-zero goals, release sustainability reports, and prioritize ESG, monitoring these companies’ efforts has become increasingly prevalent.
“SoCalGas is a large, sophisticated entity,” said Bonta. “While we appreciate its cooperation in our investigation, SoCalGas should have known better than to broadcast unqualified claims suggesting that all natural gas is ‘renewable.’ Truth in marketing matters, and it’s required under state law. Today’s settlement should send a clear message: The California Department of Justice is committed to holding accountable corporations that mislead or deceive consumers about the environmental attributes of a product.”
Other major corporations have faced legal action against environmental claims in recent months, especially in sectors that may have more difficulty decarbonizing, such as air travel and fashion. Delta is facing a consumer class action lawsuit for claiming carbon neutrality, and KLM faces similar allegations for their “Fly Responsibly” campaign.
Meanwhile, Nike faced allegations of promoting a “sustainable” clothing line that used plastic and other non-biodegradable materials. Gucci has been reviewing its environmental claims after asserting carbon neutrality since 2018, as most of its efforts have used potentially faulty carbon credits to reach its carbon elimination goals.
SoCalGas also represents an industry in which decarbonization is difficult to achieve. According to the settlement, though, consumers should not be given any impression that fossil fuels are “renewable.”