(Credit: Canva)KLM is the latest airline to get sued for allegedly making false claims about its climate promises – a company pledging to be net zero by 2050. Climate activists maintain its “Fly Responsibly” ads are misleading, violating the European Unfair Consumer Practices Directive.
The suit is part of a pattern to shine a light on companies’ promises to cut their CO2 levels – something the activists call “greenwashing.” Earlier this month, Delta Air Lines got hit with a suit for making “false and misleading” claims intended to sell more plane tickets. The activists said green products go for a premium, which eco-conscious consumers will pay.
"It would certainly not be in our interests to misinform our customers. It’s our responsibility to make future travel as sustainable as possible," the airline explained to Reuters. "We believe that our communications comply with the applicable legislation and regulations.”
London's Grantham Research Institute on Climate Change and the Environment says campaigners have filed nearly 2,000 lawsuits globally. Beyond the airline sector, it said climate activists are targeting Shell, TotalEnergies, and RWE.
Climate negotiators took up the issue at a major conference in Bonn, Germany. The so-called “Global Stocktake” takes stock of national actions and assesses the collective progress. Countries must work hand-in-glove with industry, ensuring they run their operations with the cleanest fuels and adopt the most energy-efficient technologies — if they are to keep their word.
To that end, Accenture says about 34% of the world’s largest corporations have carbon neutrality goals. But 93% of them won’t hit their 2030 targets unless they speed up their emissions reductions. And now Britain makes it mandatory for more than 1,300 companies to disclose their climate risk to regulatory authorities.
The U.S. Securities and Exchange Commission has proposed requiring publicly regulated companies to do the same – to tell shareholders how they assess and manage their climate risks.
“Climate is a business issue. Like any other, it should be proactively incorporated into a business strategy. That means mitigating new risks and adding value,” said Roger Ballentine, a climate capitalist who is the president of Green Strategies Inc.
“The capital markets are asking an increasing number of questions,” he continued at a conference. “When your largest institutional shareholders seek better answers, that moves the needle. It is central to creating value. The SEC proposal could put climate capitalism on steroids.”
Companies seek to hit net zero by moving to sustainable fuels and modern energy-efficient technologies. But that only gets them so far, requiring them to purchase carbon credits – a financial class that has recently gained much negative press. In other words, companies buy carbon credits to save the rainforests.
Forests are carbon sinks, absorbing 7.6 billion metric tons annually. As it now stands, the voluntary carbon market has the most significant market share — private deals negotiated between landowners and intermediaries that are outside the jurisdiction of the global climate agreement. Voluntary credits account for only 200 million tons of emissions reductions in 2021, a fraction of the 500 billion tons needed by 2050, according to the United Nations Framework Convention on Climate Change. Building scale is the next step.
At last year’s COP27 climate conference in Egypt, 192 allowed companies to hit the fast track and buy credits directly from countries, bypassing the voluntary market. Those “sovereign credits” will scale that number higher. This writer is the editor at large for the Coalition for Rainforest Nations, representing 65 countries that could potentially issue sovereign credits.
The rainforest nations have successfully reduced their emissions and kept their trees standing. But the financing hasn’t been forthcoming, putting pressure on them to use those trees for timber or that land for farming.
“Sovereign carbon credits have the potential to enable countries to reduce the cost of implementing their climate pledges,” says Deutsche Bank’s Markus Müller, chief investment officer ESG in an interview. “Nature and its systemic value must become part of our economic decision-making.”
The global stocktake will remain a major theme at climate conferences – the progress countries and companies are making toward their net-zero goals. And activists are also on the case, monitoring their progress. The aim is to ensure carbon integrity – the steps they take to reduce their carbon emissions.
