Companies use net-zero and carbon-neutral statements on product labels, in advertising campaigns, and in corporate sustainability reports to signal their commitment to climate action. In recent years, such commitments have surged, followed by some companies scaling back their ambition. At the same time, consumers, states, and municipalities have begun scrutinizing what these statements mean and challenging them under state consumer protection laws. Several factors play into how courts assess these climate statements:
- Timing. Claims about current operations (e.g., “this product is carbon-neutral”) raise different questions than future commitments (e.g., “we will reach net-zero greenhouse gas emissions by 2040”), though both have been challenged.
- Specificity. Specific, testable statements create legal risk if they understate or mischaracterize a company’s or product’s carbon footprint. However, consumers and investors are more likely to dismiss vague statements as “puffery” or marketing hype.
- Context. An accurate statement that omits information can be misleading if it changes how an investor or consumer understands it.
- Supporting evidence. Some companies support their decarbonization statements through offsets and third-party certifications, though neither is a complete shield from liability.
- Relationship with disclosure. Consumer-facing and investor-facing disclosures can create exposure on both fronts if they are meaningfully different.
This paper reviews litigants’ assertions of greenwashing and the consumer-protection legal framework courts are applying. It also examines how courts treat product-level and corporate-level claims, including future commitments, and how offsets, third-party certifications, net-zero alliance membership, and investor disclosures affect legal risk. Finally, the analysis highlights important unresolved questions.
