"New ESG Lawsuit Targets Aspirational Statements", 23 Jun 2021

Earlier this month, the nonprofit Earth Island Institute filed a lawsuit against Coca-Cola, alleging that the company falsely and deceptively represents itself as “a sustainable and environmentally friendly company, despite being one of the largest contributors of plastic pollution in the world.”

These types of lawsuits aren’t new. As more companies have started to develop Environmental, Social, and Governance (“ESG”) goals and to make claims about their progress towards achieving those goals, we’ve seen more suits challenging the accuracy of those claims. But this lawsuit is a little different.

While most lawsuits target claims about past or present results (which, in many cases, can be proven or disproven), the current lawsuits targets many aspirational and forward-looking statements (which are inherently harder to prove or disprove)...

Earth Island Institute alleges that Coca-Cola’s campaign is misleading because “the company is far from what consumers would understand to be a sustainable business.” As evidence, the complaint cites the company’s current plastic production and casts doubts about how much of an impact the company’s sustainability plans will have in the future.

It’s too early to tell how this case will turn out, but companies that make claims based on future ESG goals will want to pay attention. If the court allows the case to go forward, it could suggest that companies will have to take greater care when talking about future goals.