“Rise in legal challenges over carbon credit schemes”, 25 June 2025

Judges across the world are proving sceptical of companies’ attempts to offset their greenhouse gas emissions by buying carbon credits, a report has found.

In an analysis of nearly 3,000 climate-related lawsuits filed around the world since 2015, the latest annual review of climate litigation by the London School of Economics found action against corporations in particular was “evolving”...

Dozens of legal challenges over the past decade have raised arguments related to carbon credits, and many have been successful.

Last month, Energy Australia acknowledged that carbon offsets did not prevent or undo damage caused by greenhouse gas emissions,... The announcement followed a greenwashing lawsuit brought against the energy company…

In October in the US, two residents of Portland, Oregon, sued the state’s largest natural gas company, NW Natural, over its “Smart Energy” offset scheme…

Other lawsuits target companies and financial services that market themselves to sustainability-conscious consumers, challenging a lack of transparency or clarity.

In Germany, greenwashing lawsuits have proliferated after a judgment last year against the sweet company Katjes. The federal court of justice ruled that the company’s use of the term “climate neutral” to market its fruit gummies was ambiguous…

While greenwashing lawsuits tend to focus on claims made by companies in their most lucrative markets in the global north, courts have also become involved in disputes over whether offsetting schemes themselves – many of which are in the global south – respect the rights of local communities…

The LSE report found a growing body of lawsuits in which vulnerable communities or environmental groups have challenged climate mitigation or adaptation projects based on fairness, procedural deficiencies or biodiversity harm…