As greenwashing legal action moves from a legal risk to a regulatory reality there are new risks on the horizon for all advertising agencies according to ClientyEarth.

Various actors are increasingly enforcing the redress of misleading claims, including environmental NGOs, consumer groups, advertising regulators, consumer regulators, class action lawyers and competitors. For example, the European consumer network of 27 consumer regulators is investigating 20 different airlines for making a range of misleading claims. A French prosecutor is investigating an oil and gas company for potential criminal infractions relating to greenwashing.

Now new legal and regulatory actions are starting to look beyond instances of individual misleading claims to a more in-depth scrutiny of the strategic, collaborative role that agencies have played in support of polluting clients.

For example, the ‘Dieselgate’ scandal attracted further regulatory investigations and follow-on litigation, as claimants and regulators have seen the potential for fines and damages. Such further legal action tends to come with compelled disclosure of internal documents (which may include documents relating to or held by the relevant ad agency) and/or significant financial impacts in the form of fines or damages. These are significant risks to advertising agency clients, which relate directly to the work agencies do.

Another example might be the greenwashing litigation and regulatory enforcement over airline claims, with the Danish consumer ombudsman in Denmark reporting KLM to the police for greenwashing.

There are direct legal risks to agencies themselves too. There is a substantial body of litigation, primarily in the US, relating to the harms that high-carbon advertising and PR has caused by holding back progress on climate change. For example, California brought such a case against a group of the largest private oil and gas companies, seeking to recover climate damages facing the State. California recently filed a new case seeking damages for the PR strategy around ‘recycling’ plastic to deal with its health and environmental impacts.

Although there is currently no case seeking to recover climate damages from agencies, companies involved in the production of harmful advertising and business practices have been held liable previously, under third party liability theories. In a case similar to the one brought by the State of California, McKinsey is now the subject of a claim for damages for climate harms brought by a county in Oregon for its alleged coordination and participation in disinformation campaigns to downplay or deny the causal link between oil and gas companies and extreme weather disasters.

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