Chevron accused of “greenwashing” by environmentalists in federal complaint
HOUSTON (Bloomberg) --Chevron Corp. is misleading consumers about its efforts to reduce greenhouse gas emissions, environmental groups said in what they described as a first-of-its-kind complaint filed with the Federal Trade Commission.
Chevron’s pledge of “ever-cleaner energy” amounts to so-called greenwashing because it hides the reality that the company’s production plans may end up increasing absolute emissions, according to Global Witness, Greenpeace USA and Earthworks. Ads touting the oil giant’s environmental record and investments in clean tech disguise its role as one of the world’s biggest corporate polluters, the nonprofit groups say. The complaint comes just days after Chevron announced a strategy centered on “higher returns, lower carbon.”
The allegations are “frivolous,” Chevron said in a statement. “We engage in honest conversations about the energy transition.”
An FTC spokesman didn’t immediately respond to a request seeking comment.
Lodging the complaint with the FTC, which investigates claims of deceptive advertising by companies, is potentially a new line of attack for environmental campaigners, who view the Biden administration as more sympathetic to their criticisms of Big Oil. Biden made clean energy a key pledge in his election campaign last year and took the industry by surprise in the first months of his presidency by canceling the Keystone XL crude pipeline and restricting drilling on federal land.
“This really is a test for the new administration to step up and to make good on their promise to make tackling the climate crisis a key priority,” said Julie Anne Miranda-Brobeck, a spokeswoman for Global Witness. The Chevron complaint marks the first time environmental campaigners have gone to the FTC to accuse an oil major of greenwashing, the nonprofit groups said.
Chevron Chief Executive Officer Mike Wirth said last week that the company sees a “pathway” to net-zero carbon from its own operations and is committed to lowering emissions intensity 35% from 2016 to 2028. Intensity goals target pollution per barrel but do not necessarily cap or reduce overall emissions. The company supports the Paris Agreement, is investing in renewable power in support of its operations and will spend $3 billion on clean tech through 2028, it said.
This amount is around 3% of Chevron’s annual capital budget, and the company may increase oil and gas production by around 15% over the next four years.
The FTC is seen by campaigners as another avenue for applying pressure on Big Oil, in addition to the courts, where companies including Chevron are facing a series of lawsuits from about a dozen U.S. cities, counties and states to make them pay for the costs of adapting to climate change. The companies involved have said the suits are baseless.
Appointments by President Joe Biden to the five-member FTC, which currently has an empty seat and is split between Democrats and Republicans, may help the environmental groups’ case.
One of the FTC’s key focus areas in energy should be to “deter greenwashing and deceptive environmental claims,” Commissioner Rohit Chopra wrote in December. Chopra has been nominated by Biden to run the Consumer Financial Protection Bureau, leaving two Democratic seats on the commission that will need to be filled. Biden is likely to nominate Columbia Law School antitrust expert Lina Khan for one of them, according to people familiar with the matter.
In November, six other nonprofit groups filed a complaint with the FTC alleging that while Cargill Inc. product labels advertise the company’s links to family farmers, its actual production methods are exploitative. Cargill said the claims lack merit and that it conducts business in a legal, ethical and responsible manner.
Chevron and U.S. rival Exxon Mobil Corp. have stepped up their efforts to engage on environmental issues in the past year as investors demand they position themselves for a transition to cleaner energy. Along with setting emissions targets, both have touted investments in clean-tech startups and carbon capture, though these currently represent a small portion of their total capital budget.
“There’s a growing trend right now of Big Oil trying to paint itself as green and it’s growing at a rapid rate,” said Josh Eisenfeld, a spokesman for Earthworks. “They’re trying to capitalize on a market in a predatory way. They’re doing that to maintain their social license they’re doing that to attract investors and keep the ones they have.”
Social justice law firm Richman Law & Policy is representing the environmental campaigners in the complaint.
