ANALYSIS: Cases Could Define Scope of Airline Greenwashing Risks

Plaintiffs are asking three federal courts to weigh in on the types of sustainability representations that airlines can legally make without misleading consumers. Delta Air Lines Inc., Koninklijke Luchtvaart Maatschappij (KLM), and United Airlines Holdings Inc. all face class actions by stakeholders who claim the airlines misrepresented their emissions-related efforts.

These pending lawsuits could chart a new course in ESG litigation, clarifying which types of sustainability representations from companies with carbon-intensive operations are likely to survive greenwashing challenges from skeptical stakeholders.

Airline Industry’s Carbon Footprint

Although several airline companies make representations on their emission-reducing behavior—such as being carbon neutral or using sustainable fuel—as part of their environmentally-friendly campaigns, their performance results on GHG metrics vary.

To gauge where airlines are generally in their GHG emissions—as well as their efforts to manage them—we analyzed those companies for which Bloomberg metrics on both of these factors are available.

Hover over the data points in this interactive graphic to see specific company names and data. If you are having trouble viewing this interactive graphic, please enable third-party cookies on your browser. Terminal users, please click here.

Bloomberg provides scores on a 1-to-10 scale (10 is the best) that investors can leverage to gauge company performance across three pillars: environmental, social, and governance. “GHG emissions management” belongs to the environmental pillar.

Airline companies differ in their GHG emissions management issue scores, ranging all over the scale, based on their disclosures and performance record in managing emissions. Airlines’ absolute emissions also vary dramatically, from less than 1 million metric tons of CO2e to almost 35 million. (“Absolute GHG emissions” include both Scope 1 and Scope 2 emissions. 2022 represents the most recent annual data available.)

As the blue data points on the chart show, the three airline companies facing greenwashing lawsuits are achieving very different results on emissions management versus absolute emissions. Delta, KLM (which merged with Air France in the early 2000s), and United are all in the upper third of GHG emissions management issue scores in this sample (all scoring between 7.85 and 8.97). But all three of these companies were among 2022’s top five emitters: 30.9 million metric tons of CO2e by Delta, 30.5 million by United, and 22.7 million by KLM.

Three Questions About Airline Sustainability

Three pending cases against these companies have the potential to effectively serve as test cases for the viability of sustainability claims against airlines in US courts.

Can an airline company represent that it is carbon neutral?

In May 2023, a consumer plaintiff filed a lawsuit against Delta for promoting that it was “Carbon Neutral Since March 2020.” Delta’s representations of carbon neutrality were predicated on carbon offsetting.

The consumer plaintiffs allege that Delta’s carbon neutral representations were false and misleading to customers, many of whom are willing to pay a higher premium for what they believe to be a carbon-neutral flight. The case, Berrin v. Delta, is ongoing in the Central District of California.

Can an airline company represent that they have sustainable operations?

In November 2023, a consumer plaintiff filed a complaint challenging KLM’s “Fly Responsibly” advertising campaign. As part of the campaign, KLM told its customers that its “C02Zero” program allows travelers to pay for their share of the carbon dioxide emitted during a flight.

However, the consumer plaintiff alleges that KLM’s environmental representations lack the proper qualification statements because the company fulfills these claims through carbon offsetting, using a small percentage of biofuel, and leveraging insufficient scientific and accounting methods. Simijanovic v. KLM is ongoing in the Eastern District of Michigan.

Can an airline represent that it uses 100% sustainable fuel?

Also in November 2023, a consumer plaintiff filed a lawsuit against United that targets the airline’s representation that it is “100% green” and the first to use 100% “Sustainable Aviation Fuel.” The plaintiffs claim that United’s purported use of the fuel was misleading because the company gets most of its energy from fossil fuels. Zajac v. United Airlines is ongoing in the District of Maryland.

For additional information on these and other lawsuits alleging misleading emissions representations, see Bloomberg Law’s first report in the 2024 Litigation Trends Series, ESG Litigation: Greenwashing & Other Risks.

What’s Ahead for Carbon-Intensive Industries?

The airline industry is not the only carbon-intensive industry mentioning emission-reducing behavior, such as using sustainable fuel or promising carbon neutrality. Based on keyword searches within Form 10-Ks and Definitive Proxy Statements on Bloomberg Law’s EDGAR Advanced Search, companies in the manufacturing, transportation and utilities, services, and mining industries (as defined by their SIC codes) are mentioning these terms with a growing frequency.

Among these four industry groups, manufacturing companies—which include industries like metals, textile products, and chemicals—mention sustainable fuel or emissions reduction terms the most. The runner-up industry, transportation and utilities (which includes airlines), mentions the terms almost half as often as manufacturing.

The Delta, KLM, and United cases may serve as test cases for greenwashing claims against carbon-intensive companies in the US, but these cases are unlikely to be the last—and companies in the manufacturing industry may be particularly vulnerable.

Bloomberg Law’s first report in its 2024 Litigation Trends Series, ESG Litigation: Greenwashing & Other Risks, is available here for subscribers and here for non-subscribers.

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