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Environmental, social, and governance risks and opportunities

New York is Coming for Your Cheeseburger with Greenwashing Case

An instructive read on greenwashing for all business leaders who want to mitigate their climate change risk
greenwashing

This blog may sound like a broken record as we have time and again warned about the risks of a business claiming that they will be “net zero greenhouse gas emissions by 2040” or the like.

For readers who may not have heeded our warnings and even clients we have offered counsel and advice to before they make environmental marketing claims or disclosures required by governments (e.g., tenants disclosing greenhouse gas emission data to landlords under building energy performance standards (BEPS) laws and the like), reality set in this past week.

Last Wednesday, New York Attorney General Letitia James filed a lawsuit against JBS USA Food Company, the American subsidiary of the world’s largest producer of beef, alleging greenwashing in the company’s statements in a print ad and on its website “that it will achieve net zero greenhouse gas emissions by 2040 ..” in a scheme to garner climate conscious customers.

The greenwashing lawsuit filed in state court claims JBS USA engaged in deceptive acts or practices, false advertising, and repeated or persistent fraudulent or illegal conduct justifying relief ranging from an injunction for future bad acts accompanied by future audits of all consumer facing publications to a $5,000 civil penalty per violation and to “disgorgement of all ill-gotten profits, funds, and assets traceable to its fraudulent, deceptive, or illegal acts or practices.” But the biggest peril to JBS USA may be reputational risk by a coterie of environmental groups that have publicly sought to halt the company’s planned listing on the New York Stock Exchange.

The complaint figuratively and literally has the New York State government coming for your cheeseburger when it alleges, .. “Beef has the highest total greenhouse gas emissions of any major food commodity, and beef production is linked to large-scale deforestation, especially in the Amazon rainforest, which further drives climate change by releasing greenhouse gases and eliminating trees and plants that absorb and store carbon dioxide ..”

The complaint then incredibly avers, “Even if it had developed a plan to be ‘Net Zero by 2040,’ the JBS Group could not feasibly meet its pledge because there are no proven agricultural practices to reduce its greenhouse gas emissions to net zero at the JBS Group’s current scale, and offsetting those emissions would be a costly undertaking of an unprecedented degree.”

Letitia James’ filing goes on to cast in a negative light that, “Across its marketing materials, the JBS Group has made sweeping representations to consumers about its commitment to reducing its greenhouse gas emissions, claiming that it will be “Net Zero by 2040.”

The pleading’s ultimate greenwashing allegation is that having made such an aspirational statement, “The JBS Group has repeatedly and persistently made unsubstantiated and misleading environmental marketing claims to New York consumers, .. .. and has profited from its fraudulent and illegal business activities.” That allegation is founded in the apocalyptic environmental belief that net zero is not attainable from a meat processor.

What this case is truly about is made clear in Letitia James’ post on X, “The beef industry is one of the largest contributors to climate change, and JBS has falsely advertised its commitment to sustainability and endangered our planet.” So, Letitia James’ problem is with beef. And when the pleading describes that “as of 2021, the JBS Group’s estimated annual greenhouse gases were more than those of the entire country of Ireland” which ignores that one state attorney general is seeking to inject herself in the purchasing decisions of all American consumers buying the food produced by the company’s U.S. operations can process more than 200,000 cattle, 500,000 hogs and 45 million chickens a week. Despite the more than $10 Billion market cap of this Brazilian based producer of animal proteins, the Complaint avers there is nothing the company that has operations on six continents can do about its environmental impact, apparently because cows belch methane (evidently it is not an anthropogenic thing).

First, they came for JBS Group, but some have observed that Tyson Foods, the world’s second largest processor of animal proteins has a net zero emission by 2050 target. And Smithfield, the largest pig and pork producer across the globe, says the company’s U.S. operations will be carbon negative by 2030. There are greenhouse gas commitments across the food production industries and increasingly by thousands of businesses across all sectors, including many of those commitments being mandated by government BEPS laws and the like that expose businesses to risks from greenwashing claims.

The Complaint in this case is an instructive read on greenwashing for all business leaders who want to mitigate their climate change risk.

We continue to advise a broad breadth of businesses about greenhouse gas emissions as well as related required disclosures and advertising claims. We would be pleased to speak with your organization.

Make no mistake, the New York State government is coming for your cheeseburger with this greenwashing case.

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Join us for a live webinar “Remove Slavery From Your Supply Chain” 30 talking points in 30 minutes, Tuesday, March 19 at 9 am ET presented by Stuart Kaplow on behalf of ESG Legal Solutions, LLC. The webinar is complimentary, but you must register here.

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