US Governments Could Crack Down on Greenwashing – Here’s How

An anti-greenwashing law in Canada compelled polluters to scrub misleading content. Could a new bill in Pennsylvania set an example for the United States?

By Emily Sanders

“Experts agree: [carbon capture and storage] is one of the most important low-carbon technologies required to achieve societal climate goals.” 

So says ExxonMobil, in a Facebook ad targeting hundreds of thousands of people across the United States. The ad, which launched last October and ran most recently this month, leads viewers to a 30-second video with computer-generated models and captions describing a seemingly idyllic process. “The CO2 is safely and permanently stored beneath impermeable rock,” one says.

Exxon has pledged to invest billions of dollars in CCS, a technology aimed at capturing and sequestering carbon emissions (much of which is used to recover more oil). Neither experts nor Exxon’s own scientists believe that CCS can effectively address climate change — and the process has in several cases proved remarkably unsafe. But a slew of advertisements from oil companies popping up on social media, leading news sites, and podcasts claim otherwise.

Can anti-greenwashing bills work?

Under a newly proposed law, ads like these could be banned in the state of Pennsylvania. H.B. 2525, introduced this month by State Representative Chris Rabb, aims to prevent corporations from engaging in greenwashing — or misleading environmental marketing — in order to gain a greener reputation while covering up their harm to the planet. 

“This is a state-based approach to cracking down on corporations that take advantage of environmentally conscious consumers,” Rabb said. The bill would amend the state’s Unfair Trade Practices and Consumer Protection Law to “prohibit corporations from using deceitful and manipulative practices,” including references to terms like “net zero”, “low carbon,” and “cleaner energy,” as a means of “intentionally market[ing] their products in a manner that makes them appear to be better for the planet than they really are.”

Pennsylvania’s bill is one of several new legislative efforts to tackle greenwashing across the globe. In June, the Canadian Parliament passed new amendments to the country’s Competition Act, which governs competition between businesses to protect Canadian consumers, by adding a new provision regulating environmental claims in advertising. The European Union is also moving closer to passing a package of directives designed to define and regulate greenwashing by businesses. [Update: a new bill similar to Pennsylvania’s was just introduced in the New York State Senate on August 14.]

The efforts all aim to address a growing trend: as concerns about the companies’ increasing investments in oil and gas have gotten louder, so too has the volume of the industry’s “green” marketing claims. 

Troves of internal documents have revealed an industry-wide strategy to market unproven technologies, like carbon capture and algae biofuels, and unsubstantiated climate pledges in order to sidestep demands to phase out fossil fuels. 

“For decades, fossil fuel companies have used advertising and PR campaigns to knowingly mislead the public about the harms of their products and their environmental commitments,” said Duncan Meisel, executive director of Clean Creatives, an organization pushing advertisers and PR firms to drop fossil fuel clients. 

Those commitments are now under heightened scrutiny – not just by advocates, but by scientists, lawmakers, and international bodies. In June, UN Secretary General Antonio Guterres called on governments to ban all advertising from fossil fuel companies. 

“Any legislation that makes it harder for polluters to mislead the public will also make it easier to rapidly shift our economy towards clean energy,” Meisel said. The question now is how those bills could be most effective – and where they would be most likely to succeed.

‘Rapid and dramatic changes’

Canada’s new law, which threatens multi-million-dollar penalties for promoting false environmental claims, has had a sweeping effect since its passage. In June, the Pathways Alliance — a lobbying group representing the country’s six largest oil sands producers — scrubbed its website that had advertised a largely federally funded $16 billion carbon capture plan for oil sand sites. Most of the member companies deleted their own environmental messages on websites and social media. Exxon’s Canadian subsidiary, Imperial Oil, removed dozens of documents referencing carbon capture from its website, and Shell deleted its “net-zero” goal, according to reporting from DeSmog.

In a statement last month, the Pathways Alliance said the law posed “significant uncertainty for Canadian companies that want to communicate publicly about the work they are doing to improve their environmental performance, including to address climate change,” but claimed its disappearing online presence was “a direct consequence of the new legislation and is not related to our belief in the truth and accuracy of our environmental communications.” 

Those examples of “rapid and dramatic changes” to the companies’ online profiles indicate that “this approach works well and quickly,” Rabb said. Now, he’ll test a similar approach in the United States.

Every state already bans false advertising — and the attorneys general of California, D.C., New Jersey, Vermont, Minnesota, Massachusetts, and Connecticut, along with several municipal governments, are all suing oil companies for violating their consumer protection laws. But the Pennsylvania bill’s inclusion of greenwashing claims would “show the growing importance [of addressing greenwashing] as legislatures try to do something about, for example, climate change,” said Renée Wicklund, cofounder of Richman Law & Policy, a law firm focused on corporate accountability.

To help determine if a particular advertisement is “unfair or deceptive” in violation of Pennsylvania’s consumer protection law, Rabb’s bill defines some of the most common greenwashing tactics, including the use of “paltering” (telling selective truths to give an overall false impression), “net zero” emissions claims, and “reputational advertising” (selling a brand, not a specific product). Under the proposed amendments to the state’s consumer protection law, if a company’s environmental marketing palters, includes unsubstantiated net-zero pledges, or uses reputational advertising to give an overall deceptive impression of its products, the company could be subject to monetary fines or compensatory damages. 

Local governments have taken steps to raise awareness about the dangers of fossil fuels in other ways. In 2020, Cambridge, Massachusetts became the first U.S. city to require businesses to put labels on gas pumps disclosing the risks that gasoline, diesel, and ethanol pose to human health and the climate. 

But a greenwashing law in Pennsylvania, where the fossil fuel industry has a strong foothold, could send a pivotal signal to other states. Pennsylvania is the second largest producer of gas after Texas, still a major producer of coal, and a growing hub for plastic manufacturing facilities operated by oil and gas giants like Shell. Last month, Governor Josh Shapiro signed a new industry-celebrated law to facilitate the adoption of carbon capture projects as new pipelines and fossil fuel facilities are being built across the state. 

Earlier this year, Bucks County became the first Pennsylvania municipality to sue fossil fuel companies for climate damages following a summer of deadly flash floods.

“It seems only appropriate that Pennsylvania would be the first,” Rabb said. 

Federal action?

Some have speculated that a federal ban on fossil fuel advertising in the United States would be frustrated by companies claiming that such bans violate their free speech. But “there’s no First Amendment protections for false and misleading advertising,” said Rebecca Tushnet, a First Amendment professor at Harvard Law School. 

The question, explained Tushnet, “is entirely over the question of what counts as false or misleading” — and whether the legislature gets to determine the answer. “It turns out that that is a political question, and that the United States is in a moment where huge changes in First Amendment jurisprudence are possible,” she said. 

There’s plenty of evidence to support arguments that the fossil fuel industry’s climate marketing is not only false and misleading, but that the companies themselves are aware of that. A 2022 peer-reviewed study of oil companies’ climate pledges found that “accusations of greenwashing appear well founded.” A new analysis of the eight largest U.S. and European fossil fuel producers’ climate plans by research group Oil Change International found that none would sufficiently limit global warming. Following a years-long investigation, a bicameral congressional report recently concluded that oil majors are “misrepresenting their business plans, their investments in low carbon technologies, the alleged safety of natural gas, and their support for various climate policies and emission reduction targets.”

Often the greatest harm to consumers, said Tushnet, comes from not knowing the meaning of terms that companies use in their advertisements. At the regulatory level, that could be addressed in part when the Federal Trade Commission — the agency tasked with protecting consumers from fraudulent business practices — updates its Green Guides, which are intended to help curb deceitful environmental advertising. The federal government may have additional opportunities to define and set standards for frequently used terms, “which could be more useful, even if the definitions weren’t perfect.”

Oil companies have already tried to make First Amendment arguments using anti-SLAPP (or Strategic Lawsuits Against Public Participation) statutes to combat lawsuits accusing them of consumer fraud. “The irony is here when a giant oil company is trying to bring an anti-SLAPP action as if these consumer plaintiffs could somehow silence these corporations through their litigation budgets,” said Wicklund, noting that any statute that promotes transparency is a good thing. 

“Let the consumers make up their own minds,” she said. “I think some of these companies would be surprised that consumers would be more respectful of that than of patting them on the back and saying everything is fine.”

This article by Emily Sanders was originally published on Exxon Knews. It is republished here as part of the global journalism collaboration Covering Climate Now.