Green Building Law Update

Environmental Law and Sustainability for Business

Greenwashing Lawsuit Alleging Plastic Pollution by PepsiCo is Dismissed

By Stuart Kaplow on Posted in Environmental, Green Washing, greenwashing, recycling

On October 31, PepsiCo won a victory obtaining the complete dismissal with prejudice of a suit by New York Attorney General Letitia James alleging that PepsiCo had created a “public nuisance” of plastic litter and marine plastic pollution in New York’s Buffalo River and surrounding environs.

At a time when greenwashing claims have become de rigueur, it is hugely significant that PepsiCo is the first company to win a dismissal on the merits of these types of claims.

Upon filing the complaint in 2023, the New York Attorney General ran a media blitz publicly chastising PepsiCo for misrepresenting its “recyclability” efforts to the public.

Attorney General James claimed her office conducted a survey of plastic pollution in 2022 and that “PepsiCo and its 23 brands, including Frito Lay’s plastic packaging far exceeded any other source of identifiable plastic waste, as it was three times more abundant than the next contributor, McDonald’s.”

But following briefing and oral argument, the Honorable Emilio Colaiacovo of the New York Supreme Court rejected the Attorney General’s claims in a forceful 19 page opinion. The court held that using the tort of public nuisance in this way “is nothing more than selective prosecution based on a naïve theory” and that “this theory has never been adopted by a court in this state or any other.” The court also noted the “great cost” the State had incurred in bringing the suit, even though the Attorney General knew that “imposing civil liability on a manufacturer for the acts of a third party seems contrary to every norm of established jurisprudence.”

The Court made clear, “It is important to note that regardless of Defendant’s aspirational goals, Pepsi/Frito Lay did not pollute the Buffalo River or any other local waterways. Other people did!”

The Court concluded its opinion with a strong rebuke to the Attorney General for overstepping her authority: “While I can think of no reasonable person who does not believe in the imperatives of recycling and being better stewards of our environment, this does not give rise to phantom assertions of liability that do nothing to solve the problem that exists. Plaintiff’s proposed use of the judicial system to punish select purported offenders for what she believes to be a righteous cause risks transforming the judiciary into an arm of the legislature, or at the very least a passive partner in expanding duties that strain the bedrock of well-established law for policy purposes.”

The results in this case are important. There are other similar cases pending, filed by activist government officials and by radical environmentalist groups, against consumer products companies. We blogged just days ago, Greenwashing? Court Says Coca-Cola’s Aspirational Statements May Mislead Consumers. And the day before this decision was issued, Los Angeles County announced a lawsuit against Coca Cola and PepsiCo on similar grounds alleging responsibility for plastic packaging littered in the California County. Of course, this New York decision is not binding on the California court, but it portends arguments that may be successful by businesses defending greenwashing claims in that case and others.

This decision should be interpreted as a major victory for business, not only for companies in the plastic supply chain, but all companies that look to mitigate their greenwashing reputational and legal risk.
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Join us for the next in our “carbon based life forms” webinar series, “Administration Change Drives Environmental Change” on Tuesday, December 17 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Maryland’s War on Fossil Fuel Appliances: Criminalizing Plumbers?

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations, Energy, GHG, greenhouse gas

Maryland is proposing to ban fossil fuel burning equipment in buildings (e.g., furnaces, boilers, water heaters, clothing dryers, etc.) with two new programs, a Clean Heat Standard and Zero-Emission Heating Equipment Standard.

Flying in the face of what is being done elsewhere across the country and contrary to the stated aims of the new U.S. presidential administration, the Maryland Department of the Environment has released the two standards banning “small fuel-burning equipment” in buildings with the justification that “no existing policy requires emissions to reduce fast enough to achieve the state’s climate goals.”

What are these standards?

Opposite to and defying that the Energy Policy and Conservation Act of 1975 as amended regulates the energy use of such appliances and expressly and broadly preempts state and local laws on that subject; and further disregarding Maryland state law where the legislature has not authorized either standard by statute, the new standards are based only on the weak reed of a Maryland Governor Executive Order Mandates Climate Action, where some weeks ago the Governor directed, MDE shall:

  1. Propose a zero-emission heating equipment standard regulation that will phase-in zero-emissions standards for heating equipment to reduce carbon pollution and improve air quality inside homes and the ambient air;
  2. Propose a clean heat standard regulation to expand Maryland’s Renewable Portfolio Standard to the thermal energy system, mobilizing investment in clean heat solutions for homes and businesses.

Federal and state law challenges

MDE readily admits by describing the standards as designed to reduce carbon pollution and “improve air quality inside homes and the ambient air,” the government is pivoting from a justification of only addressing climate change to indoor health, hoping to avoid federal preemption. But there is no doubt these standards are designed to and will have the effect of banning not only natural gas, but also propane, heating oil, and all fossil fuels; and as such invalid and void consistent with recent federal appellate court decisions.

The details of these standards are yet to be known. With no legislative authority, MDE has only released PowerPoint slides and held webinars, including soliciting ideas, making it difficult to respond to what is to come. In their webinars, the bureaucrats have discussed how unsafe natural gas is in buildings saying that “2 people died” in Maryland last year by gas explosions, however, they fail to mention at least 5 Marylanders died by electrocution last year (.. but they are not banning electricity in buildings?).

These ‘good’ policy ideas apparently originate from Maryland bureaucrats coming together with a coterie of other government types, as a regional nonprofit association of state air quality and climate agencies in the Northeast, as the Northeast States for Coordinated Air Use Management, and produced a model rule. But no other state has adopted what is proposed here; Maryland will be the first. And yes, again, the Maryland legislature did not enable any of this.

Without digressing into a long litany detailing why these standards are wrongheaded, it should not be lost on anyone that just last Friday, the US EPA proposed tighter limits on nitrogen oxides (.. the very elements that Maryland seeks to regulate here) from fossil fueled fired turbines at power plants and industrial facilities; maybe creating another preemption problem for Maryland, but substantively, those sources being the correct place to efficaciously improve air quality nationwide, and not in the homes of Marylanders.

The actual written standards were obtained by Maryland from “an independent global organization,” the Regulatory Assistance Project, associated in this instance with the ClimateWorks Foundation. That model rule is the best resource available today as to what the MDE is proposing.

Economic and practical implications

Maryland is proposing two entirely new government programs beginning with creating “obligated parties” (i.e., sellers of natural gas, heating oil, propane, etc.) who must report fossil fuel sales (.. something that is already done but in a different format), then reducing greenhouse gas emissions, followed by mandatory participation in an entirely new “clean heat credit” market (.. think, a local carbon credit trading scheme) the purpose of which is to drive the replacement of customer existing appliances with zero emission heating equipment (e.g., electric heat pumps, heat pump water heaters, etc.).

So, this fuel burning equipment ban is to support an also entirely new multi Billion dollar government tax on fossil fuel that is “the” definition of regressive taking a larger percentage of income from low income Marylanders. That is, at a time when Maryland’s real GDP per capita has grown only 2.1% since 2016, compared to 11.9% for the U.S., and lawmakers were just advised the state is facing a $2.7 Billion budget deficit, how is any modicum of equity or “energy justice” going to be funded?

These two new standards are apparently to be layered on top of and in addition to the Maryland’s Building Energy Performance Standards (BEPS) which applies to large buildings, so these apply not only to all buildings not subject to BEPS (from single family residences to schools and more ..) but also to BEPS covered buildings.

A jaundiced view

MDE staff says that these standards are intended to drive appliance manufacturers to produce zero emission compliant equipment to be sold in Maryland, ignoring that is exactly the coercive behavior the federal EPAC preempts. However, making it illegal to sell fossil fuel equipment in Maryland, staff suggest the enforcement mechanism will be to criminalize the installation of equipment (even appliances purchased by a homeowner across state lines) by plumbers, electricians, and other skilled tradesmen.

These unachievable standards designed to aid in the transition away from politically disfavored industries ignore that the real problem is that Maryland consumes about 40% more electricity than it generates. As we recently blogged, Maryland needs to produce more electricity and not mandate all electric buildings, exacerbating the short supply of power in the State that is getting worse.

A better path forward

By sidestepping the legislature, Marylanders are left with these standards drafted by United Nations associated international groups and advanced by unelected bureaucrats that are wrongheaded and will not even begin to repair the planet, in lieu of any consideration of other alternatives, like simply increasing existing incentives to replace fossil fuel appliances at the end of their lifecycle with more energy efficient models.

In the name of combating climate change, the Maryland government is driving policies to create an artificial energy scarcity that will require billions of dollars in new expense, supported with taxpayer and ratepayer subsidies, to address a “problem” that the bureaucrats themselves created.

The subject of these not yet available clean heat standards is admittedly complex, but nearly all will agree Maryland should not be the only state combatting climate change by criminalizing the behavior of the plumber installing a gas hot water heater in your home.
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Join us for the next in our “carbon based life forms” webinar series, “Administration Change Drives Environmental Change” on Tuesday, December 17 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Transforming the Built Environment: LEED Green Building Hits 29 Billion Square Feet

By Stuart Kaplow on Posted in Green Building, Green Globes, IgCC, LEED, Sustainability

Last Thursday, during the 2024 Greenbuild International Conference and Expo, the U.S. Green Building Council unveiled its Impact Report: Accelerating Green Building to Improve Lives and Livelihoods. This comprehensive review celebrates three decades of innovation in sustainable building with a current capstone of more than 29 billion square feet of LEED certified space worldwide.

This report arrives at a fascinating time just preceding a new U.S. presidential administration in a period of huge technological and environmental change. It underscores the pivotal role of the USGBC and its globally recognized LEED (Leadership in Energy and Environmental Design) voluntary third party certified green building system in transforming the built environment to be more sustainable. LEED literally created the terms and phrases we use to describe green building.

The report is worth your read because through prioritizing innovation, today LEED is the world’s most widely used green building rating system.

A Global Movement in Numbers

The numbers are staggering:

• 195,000+ LEED projects spanning 186 countries
• 29 billion square feet of LEED certified space
• 547,000+ residential units meeting green standards
• 330+ LEED-certified Cities and Communities
• 5,000 certified schools, impacting the lives of eight million students
• A vibrant network of 5,300 USGBC member organizations

These achievements highlight the global adoption of LEED as the premier framework for designing, constructing, and operating sustainable buildings that not only meet our individual needs for security and shelter but also our societal needs for housing, education, workplaces, and recreation.

Yet, as USGBC President and CEO Peter Templeton aptly noted, the influence of the green building community extends far beyond infrastructure, “Our global community has shaped policy, shifted markets toward sustainable and healthy materials, inspired generations of professionals, and proven that the built environment can be a leading contributor to a better future for all.”

The Impact of LEED: More Than Just Green Buildings

Since its inception in 1998, LEED has set the gold (.. okay also certified, silver, and platinum) standard for green buildings. Its measurable impact in a typical LEED building includes:

• 25% reduction in energy consumption
• 34% decrease in carbon emissions
• 11% less water usage

The report notes that LEED certified projects across all certification levels are designed to save more than 120 million metric tons of CO2 emissions. That achievement is not enough for some, including the current crowd that demands only net zero buildings today and all electric buildings immediately in the name of climate change. But LEED was always much more than only about reducing greenhouse gas emissions. In the current version of the new constriction rating system, of all LEED credits:

• 35% relate to climate change
• 20% directly impact human health
• 15% impact water resources
• 10% affect biodiversity
• 10% relate to the green economy, and
• 5% impact community and natural resources.

When you ask people who go to school in, work in, or live in a LEED certified building they prioritize indoor air quality, chemicals and toxics in building materials, and drinking water quality. (.. none of which involve all electric buildings). This emphasis on the human health effects is not surprising given that on average people spend up to 90% of their time indoors, inside buildings.

Adapting to Meet Global Challenges

LEED’s evolution mirrors the changing priorities of our world. From its early focus on energy and water efficiency to addressing broader imperatives like resilience, human health, biodiversity, and equity, LEED has adapted to meet the unique needs of diverse building projects. And yes, there has been but will be in LEED v5, a greater emphasis on climate change.

Expansions like specialized certifications for schools, hospitals, and residential spaces have broadened its impact.

Equipping the Green Building Workforce

USGBC has played a vital role in building not only a skilled workforce to drive this transformation but also created a knowledge base to promote innovation. With over 205,000 credential holders worldwide, its educational programs, credentialing systems, and events like Greenbuild provide professionals with cutting edge knowledge and tools.

These efforts have fostered a global community of architects, engineers, yes lawyers, and other advocates committed to transforming how buildings are designed, built, and operated to create thriving, healthy, equitable, and resilient places that advance human and environmental well being.

Looking Ahead: LEED v5 and the Future of Green Building

The 2024 USGBC Impact Report is not just a celebration of past achievements, it’s a roadmap for the future, including the key initiative of launching LEED v5 in 2025, with an emphasis on building decarbonization, human health, and biodiversity.

LEED was conceived as and thrives as a “voluntary” system not mandated by governments. It flourishes where government offers incentives but is at risk when government perverts its proper mission to protect human health and the natural environment, like Maryland today moving toward all electric building to the detriment of all other human activity.

A Personal Reflection

As someone who has attended Greenbuild conferences for over 20 years, I’ve witnessed the growth of the green building movement firsthand. From its humble beginnings at the first USGBC “Green Building Conference” (.. yes, pre Greenbuild) held in conjunction with the National Institute of Standards in 1994 to the vibrant and expansive events of today, when more than 330,000 people have attended a Greenbuild, it has become “the” target rich environment for the exchange of ideas among green building professionals and the display of innovation and new applications by businesses.

This year, Greenbuild 2024 in Philadelphia marked a full circle moment, just a short drive from that inaugural conference in Gaithersburg, Maryland. It’s a testament to how far we’ve come, and how much more there is to achieve.

Final Thoughts

Green buildings, and LEED certified projects (yes, this post is being written during my train ride home from Greenbuild, but there are other very good if not great green building systems including Green Globes and the International Green Construction Code), which are about much more than only reducing carbon emissions. They represent a comprehensive approach to sustainability that addresses human health, resilience, equity, biodiversity, and more.

The occupants of our planet are better served by more green buildings rather than some small number of net zero effigies.

We know there is also a business case to be made when LEED certified buildings almost always achieve higher resale values, command increased rent premiums, higher occupancy rates, and maintain stronger investment potential, all as detailed in the report.

The 29 billion square feet of LEED certified space across the globe is a powerful reminder of what’s possible when a global community unites around a shared vision. As we look to the future, it’s clear that green building is not just a strategy, it is a journey driven by the idea that the way we build today shapes the way we live tomorrow.

Read the full USGBC Impact Report here.

The most important takeaway is you should be constructing LEED certified buildings. And consider joining all the “green people” attending Greenbuild on November 4, 2025, in Los Angeles. Together, we can continue to repair the planet building a better future for all.

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Join us for the next in our “carbon based life forms” webinar series, “Administration Change Drives Environmental Change” on Tuesday, December 17 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Gas Stoves Saved: Washington Voters Reject All Electric Building Mandates

By Stuart Kaplow on Posted in Climate Change, Energy, GHG, State

While many Americans were focused on the presidential election last Tuesday, citizens from Washington State and others interested in energy were paying attention to a successful Washington voter initiative protecting access to natural gas for homes and businesses, including preventing regulatory actions to limit access to gas in favor of all electric buildings.

On November 8, 2024, the Washington Secretary of State confirmed that Initiative Measure No. 2066 had passed, posting the election results with 1,602,66 votes in the affirmative being 51.48% of the vote. The Initiative will go into effect 30 days after the election results are certified on December 5, 2024.

As the quest for decarbonizing buildings, that is making buildings all electric (.. no fossil fuel) has become a cause célèbres from Maryland BEPS to Berkeley, California codes, for many among the iconoclastic, uncompromising, discontented radical global warming crowd, the voters of Washington pushed back with many expressing they were concerned over the economics of denigrating the current way of doing things before there is a good replacement. They opted for peak survival.

We blogged about this Initiative when it was approved to appear on the ballot, The Government is Coming For Your Gas Stove But Voters May Save You.

The Initiative Process

Washington State has a long history with direct democracy.

In 1912, Washington became among the first states to adopt the ‘initiative’ and referendum process, and while the details vary from the 26 states that have the process today, a citizen initiated ballot measure is commenced by gathering a required number of signatures causing a petition to be placed on the ballot asking voters whether to uphold or repeal a recently enacted law, providing a check over the decisions of their legislature.

What This Measure Will Do

This voter Initiative is to protect natural gas use by repealing Washington HB 1589, now chapter 351, Laws of 2024, widely referred to as “the decarbonization bill” that sought to transition away from natural gas.

Initiative Measure No. 2066 explicitly bars state and local governments from limiting access to natural gas. The measure requires utilities, including cities and towns that provide natural gas, to serve any eligible customer who requests it, even if other energy sources like electricity are available. The initiative also prevents the Washington Utilities and Transportation Commission from approving utility rate plans that would phase out gas services or make them prohibitively expensive.
Additionally, this initiative curtails the authority of the state building code council to enforce rules discouraging natural gas use in new constructions. By ensuring continued access to natural gas, voters in Washington asserted their preference for energy choice rather than a shift to all-electric infrastructure.

The complete text of the Initiative is admittedly long and, as nearly all initiatives are, was criticized by the opponents as being confusing.

Support and Opposition

In support of the Initiative, Greg Lane, Executive Vice President of the Building Industry Association of Washington, said, “Washington’s right to use gas for heating and cooking is in danger.”

Opposing the measure, Leah Missik, Acting Washington Director for Climate Solutions said, “It’s really about folks who are trying to squeeze out profit at our expense and our health. And it’s really important that we transition to cleaner and healthier energy, we’re on a path to do so, and that we’re very thoughtful about it. And this initiative would repeal policies that would put us on that pathway in a very smart way.”

Broader Implications

Washington’s vote mirrors a broader national trend of pushback against mandated energy transitions. At least 24 states have passed laws preventing natural gas bans in buildings and elsewhere new voter referendums are simmering in response to overreaching government attempted gas bans from Maryland to Colorado. In recent days there has been discussion of the legislature repealing the enabling legislation in Maryland.

The passage of Initiative 2066 also highlights the role of public sentiment in environmental policymaking. A recent Pew Research nationwide poll before the election found among both Democrats and Republicans climate change is a far lower policy priority than any other issue being polled. Americans have signaled they refer a pragmatic approach to energy policy over strict decarbonization measures.

In the November 5th election, even in Berkeley, California, voters overwhelming defeated, with more than 68% of citizens voting against Measure GG, The Large Buildings Fossil Fuel Emissions Tax, a ballot initiative we had blogged about, seeking to impose a tax on buildings 15,000 square feet or larger using natural gas, or appliances such as gas stoves for heat to fund decarbonization efforts.

Moreover, given the other significant result in the November 5th election, a second Trump Administration, these state and local fiats are inconsistent with the 47th President’s stated policy to “stop the war on oil and natural gas.”

It is also important to note that it is widely accepted that attempts by state and local government to ban gas use in buildings are preempted by the federal Energy Policy and Conservation Act and as such void and unenforceable. Voter initiatives simply take a different approach to remedying this bad energy public policy.

Conclusion

A proper role for government might be to prioritize innovation in energy rather than attempt to ban a legal substance the use of which dates back thousands of years.

By passing Initiative 2066, Washington voters have reversed course on a government ban of natural gas, prioritizing their commitment to balancing environmental goals with practical considerations. This decision in a state known for progressive environmental policies is a bellwether for future initiatives across the nation as people occupied by vast technological and environmental change, demand a say. As Washington’s gas stove saving initiative becomes law, it’s clear the public is unwilling to abandon traditional energy sources until viable alternatives are widely accessible, reliable, and affordable.

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Join us for the next in our “carbon based life forms” webinar series, “Administration Change Drives Environmental Change” on Tuesday, December 17 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Maryland Offshore Wind Project Faces Legal Storm from Coastal Communities

By Stuart Kaplow on Posted in Energy, Federal, wind turbine

A significant lawsuit was filed last week asking the Federal Court for an order “holding unlawful, vacating, and setting aside [the] September 4, 2024 decision approving the Construction and Operations Plan for the Maryland Offshore Wind Project,” the first phase of which would have permitted 114 offshore wind turbines 10.7 miles off the coast of Ocean City, Maryland and Fenwick Island, Delaware.

A Contested Project Facing Legal and Financial Hurdles

However, even before this litigation, it was not clear that this public and ratepayer subsidized offshore wind project was going to be erected anytime soon, if ever, despite being thrown a life preserver by the Maryland legislature earlier this year including ordering the Maryland Public Service Commission to renegotiate project schedules, sizes, and pricing, something not expected to be completed until next year.

The Town of Ocean City, Town of Fenwick Island, Worcester County, Coastal Association of Realtors of Maryland, Save Right Whales Association, Waterman’s Association of Worcester County, White Marlin Open, Inc., and more than a dozen other plaintiffs including prominent hotels and popular retailers sued the United States Department of the Interior, its Bureau of Ocean Energy Management and its officials.

The Complaint begins with the Biden Administration announcement of its goal of deploying 30 gigawatts of offshore wind energy projects by 2030, through a set of bold actions that will catalyze offshore wind energy “on the Outer Continental Shelf as fast as possible, sacrificing a transparent approval process, the purpose of notice and comment rulemaking and shortcutting the statutory and regulatory requirements ..”

On September 4, 2024, the Bureau of Ocean Energy Management approved the Construction and Operations Plan for the Maryland Offshore Wind Project, an 80,000 acre ocean wind project of 114 wind turbines to be constructed by US Wind Inc. in leased federal waters on the Outer Continental Shelf.

That swiftly granted final agency approval, together with BOEM’s approval of a final Environmental Impact Statement for the project, which we blogged about this past June, and a collection of various other permits from other federal agencies provide US Wind with the authorization to commence construction of the Maryland Offshore Wind Project.

Maryland Consumes 40% More Electricity Than It Produces

But construction was not going to begin any time soon, even before this lawsuit because as we noted in our earlier blog post, when one of the two successful bidders withdrew because together with most other offshore wind projects Maryland’s were not financially feasible, despite an estimated more than $4 Billion in subsidies, earlier this year the law was changed in Maryland to allow a new process lifting the existing cap on public and ratepayer subsidies. The Maryland Public Service Commission is reviewing an updated proposal from US Wind and no determination is expected this year.

To appreciate the stated reliance on offshore wind for future renewable energy, today, Maryland consumes about 40% more electricity than it produces, so the US Wind target of 2 gigawatts of renewable electricity, enough to power more than 500,000 homes could be key. We recently blogged that Maryland needs to produce more electricity.

The Complaint in this lawsuit alleges that in its swift and “bold action” not only to respond to global warming but also to create “good paying union jobs” (mentioned five times in the first five sentences of the Biden Administration fact sheet), BOEM failed to comply with numerous statutes and their implementing regulations, including the Administrative Procedure Act, National Environmental Policy Act, Endangered Species Act, Marine Mammal Protection Act, Migratory Bird Treaty Act, Coastal Zone Management Act, and National Historic Preservation Act.

The Impact on Ocean City’s Economy and Environment

The more than 90 page Complaint describes in vivid detail what is at risk: “The Town of Ocean City is Maryland’s only beachfront city and each year, millions of tourists come to Ocean City and spend billions of dollars in Ocean City, visit the free and public beaches, enjoy the pristine open ocean view, observe whales and marine life, stay in hotels or rental properties, enjoy the boardwalk and shops, and experience the City’s festivals, celebrations, and more than 20 fishing tournaments. As a major resort town, tourism is Ocean City’s primary economic driver, with tourism generating $2.1 billion and supporting more than 13,000 jobs. Ocean City’s Boardwalk is more than 130 years old and has been named one of the best classic wooden boardwalks in the United States.”

Environmental and Wildlife Concerns in the Forefront

The initial pleading, drafted by Marzulla Law, the attorneys who also represent the plaintiffs in the appeal of permits for Nantucket Vineyard Wind, the country’s first commercial scale offshore wind project, details the flaws in the BOEM review and approval:

The lawsuit claims there was a violation of the National Environmental Policy Act and the Administrative Procedure Act when BOEM violated NEPA by impermissibly segmenting analysis of the multiple areas of the offshore wind program and ignoring the cumulative environmental impacts of thousands of turbines on millions of acres of ocean that BOEM will approve in the near future.

Importantly the Complaint says BOEM failed to conduct a true alternatives analysis as NEPA requires, impermissibly limiting its review of available alternatives.

It is alleged BOEM failed to disclose and fully analyze the three phases of the project. And that BOEM failed to analyze less environmentally damaging alternatives.

The plaintiffs here argue that BOEM failed to reasonably take into account impacts on tourism and local economies when it admitted those impacts will be “moderate adverse.” Also damning is the allegation that BOEM failed to analyze the impacts on historic properties in Ocean City and Fenwick Island in violation of the National Historic Preservation Act.

In a fascinating line of attack, the plaintiffs aver that BOEM failed to adequately analyze climate change effects of constructing and operating the wind turbines. Relatedly, it is claimed that BOEM failed to analyze the impacts of blade and turbine failure and the degradation of project components.

Significantly the government released writings do not reveal anything to the contrary of the allegation in the Complaint that BOEM failed to analyze the project’s impact on the Atlantic Horseshoe Crab, a vulnerable species. And there are other deficiencies alleged in the failure to adequately study other environmental impacts.

In an apparent violation of the Endangered Species Act, these wind turbines put the fewer than 70 remaining reproductively active female North Atlantic Right Whales in grave jeopardy. In point of fact, the BOEM documents made public admit that the turbines threaten the North Atlantic Right Whale. However, the publicly released biological opinion excludes critical information about the adverse effects of other offshore wind projects directly in the migration path of the North Atlantic Right Whales. As such, the described mitigation measures are inadequate and fail to ensure that the endangered species will be protected.

More than just a hyper technical omission, the Complaint alleges that the decision fails to incorporate all of the requirements from the incidental take statement in violation of the Endangered Species Act. Additionally in violation of the Marine Mammal Protection Act, the government has authorized the take of more than a small number of marine mammals, which will have more than a negligible effect on the approximately 370 remaining individual North Atlantic Right Whales.

Moreover, the Complaint details alleged Migratory Bird Treaty Act and Administrative Procedure Act violations.

Seeking Federal Court Intervention

The plaintiffs are asking the Court for an order holding unlawful, vacating, and setting aside the September 4, 2024, decision approving the Construction and Operations Plan for the Maryland Offshore Wind Project, including the earlier issued June 18, 2024, biological opinion, and October 23, 2024, incidental take findings.

The Biden Administration’s self described bold actions to create good union jobs and catalyze offshore wind energy are alleged to have shortcut statutory and regulatory requirements. Whatever the judicial outcome, it has been a long time since US Wind entered into its power purchase agreement with the State of Maryland in 2017. Many suggest it will be an even longer time before offshore wind provides any power to households in the State, and if there is a second Trump Administration, never.

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Join us for the next in our “carbon based life forms” webinar series, “Administration Change Drives Environmental Change” on Tuesday, December 17 from 9 – 9:30 am. The webinar is complimentary, but you must register here.

Legal Showdown in DC: Lawsuit Challenges Gas Appliance Ban as Preempted

By Stuart Kaplow on Posted in Codes and Regulations, GHG, greenhouse gas, Local Government

A lawsuit worthy of attention has been filed seeking to halt the implementation of Washington D.C.’s gas appliance ban and net zero building code. That complaint is nearly identical to the litigation commenced on the same day last week against Montgomery County, Maryland seeking to stop that State’s largest county from implementing its gas appliance ban.

Those who see this as a “not my chicken” moment are not correct; this is not someone else’s problem. These lawsuits are part of a groundswell from Berkeley, California to Denver, Colorado, and now, Washington, D.C., of what are dramatic legal confrontations over wrongheaded environmental regulation and illegal energy policy by governments behaving badly in the face of climate change.

The lawsuits aver that these bans are more than just poorly executed public policy; they are part of a broader trend that plaintiffs allege is an overreach of governmental power. With similar lawsuits nationwide groups are rallying around what they see as a pattern of unlawful environmental government action that ignores consumer choice and violates longstanding federal energy statutes.

The nearly identical collation of plaintiffs in the two lawsuits, the National Association of Home Builders of the United States, Restaurant Law Center, National Apartment Association, Maryland Building Industry Association, Washington Gas Light Company, Philadelphia Baltimore Washington Laborers’ District Council, and Teamsters Local 96 are in this case seeking declaratory and injunctive relief against enforcement of the Clean Energy DC Building Code Amendment Act of 2022.

Key Elements of the D.C. Appliance Ban

The D.C. Appliance Ban prohibits the use of gas appliances in newly constructed or substantially improved existing commercial buildings (including residences over three stories) that may be mixed use structures, restaurants, apartment buildings, hotels, condos, or houses.

For those buildings, D.C. law requires the mayor to issue, by December 31, 2026, at the latest, “final regulations requiring all new construction or substantial improvements of covered buildings to be constructed to a net-zero-energy standard.”

The D.C. definition of “net-zero-energy standard” includes that “[o]n-site fuel combustion shall not be permitted for the provision of thermal energy to the building.” This prohibits the use of gas appliances, which necessarily rely upon fuel combustion in their energy use.

If the mayor does not adopt net zero energy standard regulations by December 31, 2026, “no building permit application submitted after December 31, 2026, shall be approved unless the building design complies with the most recent version of Appendix Z of the DC Energy Conservation Code. Under Appendix Z, “[o]n-site combustion of fossil fuels shall not be permitted for the provision of thermal energy to the building”. This again prohibits the use of gas appliances.

As a result, the use of gas appliances (from residential hot water heaters to commercial kitchen stoves, and more ..) will be banned in covered buildings in the District after December 31, 2026, at the latest, regardless of whether the mayor promulgates net zero energy standard regulations.

Constitutional Preemption by the Federal EPCA

This federal court complaint counters that flawed local law, .. “[b]ut the Energy Policy and Conservation Act of 1975 as amended (“EPCA”), already regulates the energy use of such appliances and expressly and broadly preempts state and local laws on that subject. The D.C. Appliance Ban falls within the heartland of EPCA’s express preemption provision because it too purports to regulate the energy use of gas appliances, by preventing such use entirely. As such, the D.C. Appliance Ban is preempted by EPCA and unenforceable as a matter of law.”

We blogged about the Ninth Circuit’s invalidation of the City of Berkeley’s prohibition on gas piping in new buildings twice, in two federal appellate decisions just last year is particularly noteworthy since it struck down this same kind of attack on gas appliances. Perhaps most notable is that the unanimous Ninth Circuit panel emphasized that “EPCA would no doubt preempt an ordinance that directly prohibits the use of covered natural gas appliances in new buildings.” Because the D.C. Appliance Ban does exactly that, there is “no doubt” that EPCA preempts it.

Implications Beyond D.C.

We blogged last week about the lawsuit against Montgomery County seeking a permanent injunctive against enforcement of Montgomery County Bill 13-22: Buildings – Comprehensive Building Decarbonization, which bans the use of gas appliances in new construction.

Those plaintiffs, substantially the same group of trade associations, companies, and unions as in the D.C. lawsuit are part of a nationwide movement of groups challenging crushing climate regulations. This litigation is taking aim at wrongheaded and often illegal attempts by state and local governments to address admittedly widely acknowledged environmental matters.  

In this instance, the D.C. Appliance Ban, plainly preempted by EPCA, “is already inflicting substantial irreparable harm on Plaintiffs and their members.”

Such is also true for Maryland’s proposed statewide BEPS with its rationing of electricity and ban on natural gas, even in existing buildings, where it must be assumed if the state legislature does not step in, the courts will. Marylanders and an increasing number of citizens across the country are already unhappy about high electric utility prices brought on by poorly implemented greenhouse gas public policies and attempted actions by state and local authorities to ration energy in the name of reducing greenhouse gas emissions are not just wrongheaded, but they will be found preempted by federal law and as such void.

Conclusion

While the attorneys we have consulted suggest the outcome of this D.C. lawsuit is all but certain, the breadth of any final judicial redress may well have lasting impacts across the country on state and local governments’ abilities to establish building codes in line with climate goals, especially as a growing number of U.S. cities push for all electric buildings.

Supporters of net zero mandates argue that direct action, now, is justified to reduce carbon emissions and combat climate change while opponents are concerned over denigrating the current way of doing things before there is a replacement.

These legal battles underscore the increasing complexity of energy policy in the U.S. and the ongoing tension between environmental goals and regulatory boundaries. As more local governments pursue net zero and decarbonization laws, they will find themselves navigating this intricate landscape of federal preemption, consumer demand, and economic impact, with significant implications for the future of American energy use and climate policy. Many would support the aims of the D.C. code amendment but believe this is the wrong way to go about it.

Lawsuit Challenges Montgomery County Gas Appliance Ban as Federally Preempted and Void

By Stuart Kaplow on Posted in Codes and Regulations, Energy, Local Government

Last Friday more than half a dozen business and labor groups filed suit seeking a permanent injunctive against enforcement of Montgomery County, Maryland Bill 13-22: Buildings – Comprehensive Building Decarbonization, which bans the use of gas appliances in new construction.

A partnership of business and labor is asking the Federal Court in Maryland for “a declaratory judgment that Montgomery County Bill 13-22 is preempted by federal law because it concerns the energy use of appliances covered by the federal Energy Policy and Conservation Act and is therefore void and unenforceable.” And seeking “a permanent injunction enjoining Defendant [Montgomery County] from enforcing or attempting to enforce Montgomery County Bill 13-22.”

Also yesterday, substantially the same coalition of plaintiffs filed a second lawsuit in Washington, D.C., challenging the Clean Energy DC Building Code Amendment Act of 2022 gas ban on new construction set to take effect in 2026 in that jurisdiction. We will blog about that legal action in the coming days.

Montgomery County’s Decarbonization Effort

In the name of battling climate change, Montgomery County Bill 13-22, recites that the buildings account for 50% of the County’s emissions, and seeks “to accelerate decarbonization of the County’s building sector” .. “moving towards 100% electric powered systems” by banning the use of fossil fuel fueled appliances (e.g., natural gas furnaces), in new residential, commercial and industrial construction located in Montgomery County.  “All electric building standards are a crucial step for the County to achieve its zero greenhouse gas emissions goal through ensuring future construction is electrified.” To that end, the bill requires the County Executive to issue, by December 31, 2026, “all-electric building standards for new construction.”

Preempted by Federal Law

Plaintiffs, National Association of Home Builders of the United States, Restaurant Law Center, National Federation of Independent Business, Inc., Maryland Building Industry Association, Washington Gas Light Company, Philadelphia-Baltimore-Washington Laborers’ District Council, and Teamsters Local 96 are seeking to halt the Mongomery County ban on the use of gas appliances in new construction from going into effect.

The Energy Policy and Conservation Act already regulates the energy use of such appliances and expressly preempts state and local laws on that subject. The County gas appliance ban falls within the heartland of EPCA’s express preemption provision because it too purports to regulate the energy use of gas appliances, by preventing such use entirely. As such, the County gas appliance ban is preempted by EPCA and unenforceable as a matter of law.

We blogged about the Ninth Circuit’s invalidation of the City of Berkeley’s prohibition on gas piping in new buildings just last year and that Federal appellate decision is particularly noteworthy since it struck down this same kind of attack on gas appliances. Perhaps most notable is that the unanimous Ninth Circuit panel emphasized that “EPCA would no doubt preempt an ordinance that directly prohibits the use of covered natural gas appliances in new buildings.”

Because this County gas appliance ban does exactly that, there is “no doubt” among each of the attorneys we have spoken with that EPCA preempts it.

Indeed, some state and local governments have since taken note of EPCA and reconsidered their efforts to enact similar bans. Eugene, Oregon reversed its natural gas ban after that federal appeals court ruling.

Because the Mongomery County did not do so on its own, this complaint says “the Court must order it to do the same.”

Impact on Consumers and Businesses

The District Court complaint reasons, “Prohibiting gas-powered cooking ranges, water heaters, furnaces, and other appliances or equipment is fundamentally inconsistent with the public interest and consumer choice, exacerbates the County’s housing crisis, and aims to shift the County’s energy demand to an electric system that is facing both historic and increasing electricity demand and dwindling dispatchable electricity supply. Due to the County Appliance Ban artificially limiting the pool of gas customers, homes, restaurants, and other businesses that rely upon gas services will be forced to pay higher gas prices than they would otherwise have to pay. Thus, the County Appliance Ban will negatively impact existing buildings as well.”

“Even though the County Appliance Ban does not take effect until the end of 2026, its chilling effect is already undermining their livelihoods, harming profits, disrupting long-term business strategy and asset planning, jeopardizing jobs and hiring and training programs, and hampering the ongoing development of new desperately needed multifamily homes.”

The Correct Path Forward

This Montgomery County gas appliance ban is plainly preempted by the federal EPCA. “There is no set of circumstances under which Montgomery County Bill 13-22 would be valid.”

That easy to reach conclusion articulated by every attorney we spoke with can be found without questioning if the de rigueur aim of decarbonization is a worthy societal goal when more than 12% of human beings’ atoms are carbon?

And further, this local legislation ignores that Maryland imports more than 40% of the electricity used in the state, much of that power generated by coal burned in nearby states (.. which accomplishes what, in a global emission issue?). Before attempting to electrify all of its buildings and ban locally used fossil fuel from its entire State economy, Maryland Needs to Produce More Electricity.  

Attempted actions by state and local authorities to ration energy in the name of reducing greenhouse gas emissions are wrongheaded. Moreover, as the earlier decided case from Berkeley made clear; and as the pending court challenge to Colorado’s BEPS programs, the all but certain coming challenges to Maryland’s proposed BEPS regulations, and this legal challenge, can only correctly result in judicial determinations that those are preempted by the express federal authority over a consistent nationwide energy conservation policy that has existed since the 1975 Gerald Ford brokered post Arab oil crisis compromise that was the Congressional enactment of EPCA.

Make no mistake there is a political angle on all of this. In the event of a second Trump Administration, it is certain the Biden Administration’s National Building Performance Standards Coalition, that is a nationwide group of state and local governments that have committed to implement BEPS in their jurisdictions, will be disbanded and these policies buried.

As we concluded in an earlier blog post, Court Saves Gas Stoves from the Government, .. the only question may be how quickly these regulatory schemes, like Maryland’s proposed statewide BEPS with its rationing of electricity and ban on natural gas, even in existing buildings, and D.C.’s prohibition on the use of gas appliances in the construction of new commercial buildings and substantially improved existing buildings including apartment buildings, will be replaced with good environmental public policy that may actually repair the planet.

We will blog about the D.C. lawsuit next week.

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Please join us for our next webinar “Greenwashing: You Need to Mitigate Your Risk” on Thursday, October 24 from 9 – 9:30 am ET presented by Stuart Kaplow. The webinar is complimentary, but you must register here.

Greenwashing? Court Says Coca-Cola’s Aspirational Statements May Mislead Consumers

By Stuart Kaplow on Posted in Environmental, Green Washing, greenhouse gas, greenwashing

A recent ruling from a federal appellate court is bringing new attention to claims of greenwashing including specifically that a business’s aspiration statements about environmental matters (e.g., “we will be net zero greenhouse gas emissions by 2040” or “we will use at least 50% recycled material in our packaging by 2030”) can be actionable.

The Case: Greenwashing Allegations Against Coca-Cola

Earth Island Institute alleges in its greenwashing complaint filed in the District of Columbia brought under the DC Consumer Protection Procedures Act that Coca-Cola generates more plastic waste than any other company in the world, to the tune of 2.9 million metric tons of plastic waste per year.

Despite that in recent years, Coca-Cola has made efforts to increase the recyclability of its products to use more recycled materials in its products, and to champion those efforts in apparent attempts to assuage consumers’ environmental concerns, Earth Island contends that these recycling efforts are the proverbial lipstick on a pig, that recycling is a woefully ineffectual mechanism for mitigating plastic pollution on the scale that Coca-Cola produces it. The appellate court wrote, “there is nothing that Coca-Cola could do, short of vastly cutting back or eliminating its plastic production, that could render it anything that even approaches an environmentally sustainable company, or so Earth Island alleges.”

The Court’s Decision: Aspirational Statements Can Be Actionable

The DC appeals court on August 28, 2024, issued a decision finding that Earth Island sufficiently pleaded that Coca-Cola’s environmental and sustainability claims are in violation of the DC Consumer Protection Procedures Act, which protects consumers against false, deceptive, or unfair business practices (.. among the strongest such laws in the country; no doubt why the case was brought in DC).

The Court explained that the offending statements appear on Coca-Cola’s website, in a 2019 “business and sustainability report,” or in Coca-Cola’s Twitter (now “X”) feed. Coca-Cola touts goals it has set for itself:

  • “Use at least 50% recycled material in our packaging by 2030.” (website, retrieved June 2021)
  • “Make 100% of our packaging recyclable globally by 2025.” (website, retrieved June 2021)
  • “Part of our sustainability plan is to help collect and recycle a bottle or can for every one we sell globally by 2030.” (tweet, Feb. 2020)

Earth Island also charges several of Coca-Cola’s other statements that are more vague, are intentional misrepresentations, including:

  • “We act in ways to create a more sustainable and better shared future. To make a difference in people’s lives, communities and our planet by doing business the right way.” (website, retrieved June 2021)

Implications for Corporate Sustainability Messaging

Coca-Cola does not dispute that it “uses a great deal of packaging, some of which inevitably ends up in the natural environment” and that there is a substantial “amount of work it has left to do” to address its “environmental challenges.” However, in its view, it is taking steps to meet those challenges so that its representations to the same effect are not misleading. The complaint does not allege that Coca-Cola made untruthful statements. The Court reasoned, “where the parties disagree is whether those statements give consumers a false impression of Coca-Cola’s current and anticipated environmental impact on the ground.”

This Appellate Court concluded “Earth Island has stated a facially plausible misrepresentation claim,” and none of the lower court’s bases for dismissal of the complaint fatally undermines it when “.. even aspirational statements can be actionable under the CPPA.”

And this cause of action is not unique. We blogged earlier this year, New York is Coming for Your Cheeseburger with Greenwashing Case, when 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, ..” were an attempt to assuage consumers’ environmental concerns.

This reasoning should be of concern to all businesses releasing statutorily required information under environmental laws, like BEPS greenhouse gas reporting that can be wielded as a greenwashing charge against a company by stakeholders and environmental activists alike.

Based on Coca-Cola’s aspirational statements, the Court reversed the earlier dismissal of Earth Island’s complaint and remanded the case for further proceedings.

Conclusion

As the Coca-Cola case moves forward, it will be watched closely by environmental advocates, businesses large and small, as well as those concerned about free speech. This court’s decision highlights the evolving legal landscape surrounding greenwashing including that truth in public facing statements may not be an absolute defense. It is concerning to many that the largest beverage company and largest producer of beef in the world are facing greenwashing claims, misapplying consumer protection laws to allege people are misled by truthful statements of the companies’ aspirations about environmental matters. Misusing consumer protection laws in the name of consumers who buy a cheeseburger and a Coke, to advance environmental aims will not repair our planet.

Businesses should take note of this ruling and examine their environmental messaging to avoid potential greenwashing reputational risk as well as to mitigate risk from judicial action.

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Please join us for our next webinar “Greenwashing: You Need to Mitigate Your Risk” on Thursday, October 24 from 9 – 9:30 am ET presented by Stuart Kaplow. The webinar is complimentary, but you must register here.

Lawsuit Against Maryland Seeks to Have First Amendment Apply to Green Power

By Stuart Kaplow on Posted in Energy, State

A group of energy companies are suing the State of Maryland challenging the recently enacted Senate Bill 1, which restrains truthfully marketing clean energy products including renewable electricity in the State, in violation of the First Amendment to the U.S. Constitution and Maryland Declaration of Rights.

They assert that the law imposes an unconstitutional “speech code” on suppliers of renewable energy, restricting the use of terms like “green, clean, eco-friendly, 100% solar,” and the like unless the providers adhere to the state’s preferred definitions, irrespective of the truth, and more ..

What does Senate Bill 1 say

Introduced in the Maryland General Assembly as Senate Bill 1 and signed into law on May 9, 2024, the law purports to be “[a]n Act concerning . . . regulation and consumer protection” in the retail energy supply sector. But in reality, the Act imposes a ‘Maryland specific environmental speech code’ on suppliers of renewable electricity who otherwise accurately, truthfully, and consistently with federal standards (.. that is complying with the Federal Trade Commission Green Guides) and other states’ laws, describe their products as “100% solar,” or the like. The Act prohibits suppliers of renewable electricity from truthfully and accurately describing their existing products as “green power,” under threat of civil penalties.

If an electricity supplier wants to market their electricity as “green power” they must adopt Maryland’s ‘preferred understanding’ of those terms, change the products they offer accordingly, and obtain advance approval of marketing materials from the Maryland Public Service Commission (.. can you say, prior restraint?) under a process that does not exist.

What is really going on?

This is not really a consumer protection law, so what is going on? Power suppliers sell green power by purchasing renewable energy certificates (also called renewable energy credits) “RECs,” from all over the country and pairing those RECs with the electricity they supply to their customers. RECs are fungible commodities that embody the renewable attributes of renewable energy generation and are recognized federally and by states as the way to substantiate “green power” claims.

But that will no longer be true in Maryland. Maryland’s new special concept of “green power,” however, would require all renewable electricity sold to Maryland customers to have at least 51% of the RECs sourced in Maryland.

That is, Maryland’s current Renewable Portfolio Standard requires both utilities and other suppliers to source 36% of the electricity sold in the state with RECs from specific types of energy (.. solar, wind, etc.). Prior to SB 1, retail energy suppliers could market electricity as “100% renewable” by obtaining an additional 64% of voluntary RECs, typically from sources within the U.S.  After SB 1, energy suppliers are prohibited from calling these offerings “100% renewable.”  To use those words, SB 1 requires retail energy suppliers to obtain at least 51% of their RECs from Maryland and only 49% from other sources, even though it is indisputable that the offering is in fact “100% renewable.”

You can’t handle the truth

The new law is little more than a misguided green power grab.

But more offensive than that bad public policy that will harm Maryland electricity customers without generating so much as one electron of new renewable power, to accomplish that, the government is foisting a speech code on electricity providers, when the Act violates the First Amendment of the U.S. Constitution and Article 40 of the Maryland Declaration of Rights by prohibiting telling the truth about the source of electricity.

A principal at a local electricity supplier has said, “.. you may remember the quote from the movie, A Few Good Men, when Jack Nicholson’s character, after being challenged for the truth by a defense attorney played by Tom Cruise, shouts, ‘You can’t handle the truth!’ This is more a George Orwell, ‘In a time of deceit telling the truth is a revolutionary act.’” For Maryland’s energy suppliers, that revolution may now come through the courts.

There are other problems with the new law beyond the free speech claims in the lawsuit, like it directs the Maryland Public Service Commission to set an annual price cap for all RECs tied to a historical average of utility pricing (.. before there was any quantity of renewable energy?) and limiting residential customers to one year contracts ( .. I have a 5 year fixed rate contract at 9.9 cents per kilowatt hour at my home that will no longer be available to others), etc. 

What’s Next

While Maryland’s government aims to boost local renewable energy sources, the lawsuit raises important questions about the balance between state regulation, market forces, and the constitutional rights of businesses to speak truthfully about their offerings. With the case now in court, the outcome could set a significant precedent for both energy policy and First Amendment rights in the context of environmental marketing.

The 37 page lawsuit seeks a declaratory judgment against the State and the Maryland Public Service Commission and others finding that the Act is unconstitutional and seeking preliminary and permanent injunctive relief preventing the implementation and enforcement of the new law’s speech restrictions become effective on January 1, 2025.

Greenstalling Isn’t Real: Understanding Business Realities in Climate Action

By Stuart Kaplow on Posted in Climate Change, greenwashing

Last week’s Climate Week NYC was driven by the theme “It’s Time,” a rallying cry meant to emphasize the urgency of climate action. However, a new term emerged in that highly charged environment, “greenstalling.”

This concept, according to some of the radical environmental movement voices at the New York event, is that businesses are deliberately stalling their climate efforts posing a significant risk to global climate change mitigation. There is a chasm between the iconoclastic, uncompromising, discontented radical global warming crowd who believe in taking direct action in defense of the planet versus the concern of many businesses over denigrating the current way of doing things before there is a replacement.

But is “greenstalling” really a thing? Or is this label just a misguided attempt by those frustrated with the coopting of mainstream environmentalism to explain complex business realities?

The Reality: Businesses Face Economic and Political Uncertainty

Businesses in the U.S. and around the world grapple with more than just environmental goals.

Businesses face economic and political instability that affects their ability to plan long-term including climate strategies. Newly proposed regulatory schemes including where governments will for the first time cap carbon are inconsistent, with environmental rules often swinging from stringent to lenient depending on location and political shifts. One minute, there’s a push for aggressive decarbonization; the next, the rules are relaxed or delayed, like in the case of courts ruling ill conceived Building Emissions Performance Standards (BEPS) local laws are preempted by longstanding federal statutes, where potentially far reaching SEC greenhouse gas (GH) emission regulations are voluntarily stayed by the federal agency in court proceedings, etc. This back and forth creates an uncertain playing field for companies, making it difficult to justify costly decarbonization investments when there’s no clear regulatory path ahead.

Moreover, businesses must contend with greenwashing reputational risks and litigation. Companies that announce their environmental commitments or compliance with government mandates (e.g., reporting required BEPS data can be misleading) can face lawsuits and public backlash. These lawsuits, coupled with the high costs of decarbonization and the complex regulatory landscape, have made some companies rethink their bold public facing climate pledges. A target like “Net Zero by 2045” might sound great in a press release, but when companies are sued for greenwashing in making such a claim because part of their solution includes offsets or the like, when the regulatory framework is unclear and the economic outlook is shaky, companies are naturally more cautious.

The Public’s Changing Priorities: Climate Takes a Backseat

In the early 2010s, sustainability was the buzzword on everyone’s lips. Companies rushed to declare their green credentials, and consumers clamored for environmentally responsible products. But today, the fervor has cooled. Climate change, while still a concern for many, has lost its shine as the most pressing issue for businesses. Other priorities, such as inflation, supply chain disruptions, and technological innovation, have taken center stage. As a result, some businesses have started to walk back their public facing ambitious GHG emission reduction goals. Others have delayed investing in unproven and unavailable decarbonization technologies and are instead pursuing innovation based solutions.

This shift away from in your face climate action has left some radical environmentalism advocates frustrated, which may explain the rise of terms like “greenstalling.” But blaming businesses for “stalling” their climate efforts ignores the broader context. The issue is not that businesses don’t want to act. It’s that the cost, uncertainty, and shifting broader societal and regulatory demands make it hard to act. In many ways, it’s less about stalling and more about recalibrating in the face of competing demands and an unpredictable future.

Enter “Green Bleaching” – The Silent Approach

While environmentalists mistakenly cry foul over “greenstalling,” a quieter and more nuanced practice has actually emerged, “green bleaching.” Unlike “greenwashing” which involves exaggerating or falsely claiming environmental achievements, green bleaching is the opposite, it involves concealing sustainability efforts. Companies engaging in green bleaching deliberately downplay or omit their green initiatives in public communications.

Why would a company choose to keep its environmental actions under wraps? One reason is fear of backlash. In today’s hyper connected world, where any claim can be scrutinized and litigated, businesses might find it safer to keep their sustainability programs out of the spotlight. The rise in lawsuits tied to greenwashing has made companies wary. Instead, they prefer to quietly do the work without attracting too much attention. There’s also the fear of public perception: if a company announces a climate target and fails to meet it or it does not meet some group’s ideal of how far the business should go, the reputational damage can be severe.

Green bleaching, then, is not about inaction but rather about protecting the company from potential risks associated with being too vocal about its environmental efforts.

Can the Market Police Itself?

As climate rhetoric heats up (.. likely faster than the planet itself), a growing number of voices are calling for a less activist government role in regulating greenwashing claims. After all, these are often consumer protection issues at their core. Shouldn’t the marketplace police itself? Some argue that letting consumers and watchdog organizations hold businesses accountable for false environmental claims would be more efficient and effective than government mandates.

However, this hands off approach is not without risks. Without regulatory oversight, the door could be left open for companies to mislead consumers under the guise of green marketing or, conversely, to hide genuine sustainability efforts out of fear of litigation.

The Middle Ground: Balancing Authenticity and Reputation Management

As companies navigate the tricky terrain of sustainability, they must find a balance between transparency and caution. Greenwashing erodes trust, while green bleaching can make it difficult for consumers and stakeholders to assess a company’s true environmental impact. Today there is no middle ground, where authentic communication avoids overblown promises but still provides enough transparency to maintain public trust, although I am confident that businesses, not government, will drive the innovation that will be central to the solutions.

What’s clear is that “greenstalling” isn’t real. The term oversimplifies the challenges businesses face and unfairly paints them as villains in the fight against climate change. Businesses are not deliberately stalling but are instead reacting to a complex mix of regulatory, economic, and public pressures. If anything, the current times call for more nuanced discussions about corporate sustainability, where the focus is on fostering innovation and genuine action rather than pointing fingers at alleged stalling tactics.

As businesses, large and small across the globe, work to find their footing in an ever evolving landscape, it’s essential to recognize that sustainability is not a linear journey. The path forward will be filled with setbacks, recalibrations, and, yes, as we often advise our clients, silence, but I am optimistic that doesn’t mean progress isn’t happening.

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