NYAG Sues Meat Producer For Making False "Net Zero By 2040" Claims - Advertising, Marketing & Branding - United States

[Gunnar Larson]

https://www.mondaq.com/unitedstates/advertising-marketing--branding/1435336/nyag-sues-meat-producer-for-making-false-net-zero-by-2040-claims


New York Attorney General Letitia James announced that she sued JBS USA
Food Company and and JBS USA Food Company Holdings for false advertising,
alleging that the companies misled consumers about the environmental impact
of the meat that they produce. The defendants (which I'll refer to as
"JBS") are subsidiaries of JBS S.A., which is a Brazilian company that
apparently claims to be the largest beef and poultry producer in the world.

The New York Attorney General's lawsuit – which is clearly going to be a
meaty case – is focused on JBS's claims that it will be "Net Zero by 2040."
According to the NYAG, in March 2021, JBS announced "a commitment to
achieve net-zero greenhouse gas (GHG) emissions by 2040. The commitment
spans the company's global operations, ... as well as its diverse value
chain of agricultural producer partners, suppliers and customers in their
efforts to reduce emissions across the value chain." The NYAG then alleged
that, in April 2021, JBS ran a full page advertisement in The New York
Times which claimed, "We are the first major global company in our industry
to commit to net zero by 2040. Can it actually be done? We think so and
we're taking real actions to achieve our goal." The NYAG alleged that
similar ads appeared on company websites and in other advertising as well.

The NYAG alleged that JBS's claim that it will be "Net Zero by 2024" is
false and misleading, however, because the company failed to fully take
into account its "scope 3" emissions. "Scope 3" emissions are essentially
the emissions from a company's vendors and suppliers (other than suppliers
of energy). According to the U.S. Environmental Protection Agency, the
problem with omitting Scope 3 emissions from a company's calculations of
its greenhouse gas emissions is that those emissions "often represent the
majority of an organization's total greenhouse gas (GHG) emissions."

And that is exactly the NYAG's concern here. The NYAG alleged that, when
calculating its greenhouse gas emissions, JBS did not account for emissions
from Amazon deforestation and other land uses changes in its supply chain.
The NYAG explained that, "Deforestation for cattle operations contributes
to the JBS Group's Scope 3 emissions not only through the immediate release
of greenhouse gases from destroyed biomass, but also through the resulting
inability of that biomass to subsequently absorb and store greenhouse gases
from the atmosphere."

The NYAG also charged that JBS's "Net Zero by 2024" commitment is also
false and misleading because of the company's current levels of production
and its plans to dramatically increase production. The NYAG alleged that,
notwithstanding the company's public commitments, it didn't have a feasible
plan in place to reduce its emissions (or to offset them) based on both its
current level of production or based on its plan to substantially increase
its production as well. As the NYAG put it, "The JBS Group, however, has
had no viable plan to meet its commitment to be "Net Zero by 2040."

This case is still at its very early stages, of course, but there are still
several important take-aways from the NYAG's complaint.

First, just because you're making an aspirational claim about something
you're going to achieve way off in the future, don't assume that regulators
and others won't say that you're making claims that require substantiation.
(For a court taking a different view, however, check out this case
involving Coke's aspirational claims.)

Second, if your environmental claims are based on certain assumptions – or
you're excluding certain factors in your calculations – you'd better be up
front about that, so that consumers don't misunderstand what you're
actually claiming you are going to achieve. That being said, regardless of
how clear an advertiser is about how it is doing its calculations, would a
regulator really be okay with a "net zero" claim that ignores a substantial
portion of the omissions?

Third, as this lawsuit also makes clear, regulators are going to look very
skeptically at your aspirational claims, even far-off ones, unless they are
based on current science and realistic, achievable plans.

{"When companies falsely advertise their commitment to sustainability, they
are misleading consumers and endangering our planet" -- New York Attorney
General Letitia James
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