USA – ILLINOIS Trends and Developments Contributed by: Steven P Blonder, Much Shelist
goals). This most certainly does not mean that companies have eschewed setting environmen- tal goals for their businesses. On the contrary, they continue to set goals but are simply not discussing those goals publicly, so as to avoid fomenting litigation. Although engaging in greenhushing may be one antidote to the problem of increasing ESG litiga- tion, it also deprives companies of the inherent value underlying public pronouncements of an ESG programme. Whether as investors or con- sumers, many are looking to engage with com- panies that are deemed to be advancing ESG initiatives. By staying silent, companies miss out on these associations and any attendant ben- efits that may accrue. One path that some companies have engaged in as part of a litigation avoidance programme is to make their environmental statements aspi- rational rather than definitive. These statements are made in the vein of “we hope to achieve” or “we expect that we will improve” rather than definitive statements espousing concrete, meas- urable goals. Properly substantiated aspirational claims may prove to be a path to success. However, companies should be forewarned that merely transforming goals into “aims” or putting “want” or “should” in front of a stated goal may not suffice to render that goal aspirational. And, even if the goal is aspirational, is it still definite enough for investors or consumers to rely upon it? If so, it may still be actionable, even if properly substantiated. But what does it mean for a claim to be “prop- erly substantiated”? How much substantiation is needed? Can the substantiation be from an industry group or does it need to be “independ- ent”? These are just a few of the questions that
need to be considered in substantiating claims. Best practices would suggest that independence and scientific rigour go a long way in providing a safe harbour for aspirational pronouncements. Green marketing has also been a hot source of claims recently. While companies have respond- ed to increasing calls for environmentally and ethically sustainable products by marketing their new offerings as “green”, private lawsuits alleg- ing that these efforts are misleading or decep- tive have multiplied exponentially ‒ a trend that will most probably continue its upwards trajec- tory. As a result, companies should engage in heightened efforts to avoid making environmen- tal claims that may be overstated, inaccurate or misleading in any way. “Clean” and “sustainable” are marketing words that are often used. Yet these words are currently giving rise to false advertising claims, proving once again that language matters. And the risk is not only of a false advertising suit. For pub- lic companies, if their marketing claims about a product lead to a decrease in the stock price, a derivative or securities claim will likely follow. Litigation Costs Continue to Rise The discovery process in litigation used to be characterised by teams of lawyers visiting ware- houses where documents were maintained and reviewing those documents page by page in search of the proverbial “smoking gun” ‒ iden- tifying which documents had to be produced in discovery and which documents might be left untouched, hidden in a company’s annals. How- ever, this rarely happens today, given that most company information is stored electronically. Yet the electronic storage of information has not, in consequence, decreased the cost of litigation – it has increased it. The vast amount of elec-
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