Airline giant KLM to face legal action over greenwashing

The greenwashing case against KLM is thought to be the first corporate lawsuit about airlines and net zero — and one of the first cases about carbon offsets.

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Environmental groups on Tuesday launched legal action against KLM, saying the Dutch aviation giant is misleading the public about the sustainability of flying.

It is thought to be the first time that the airline industry has been challenged about so-called “greenwashing.”

Netherlands-based campaigners Fossielvrij NL, supported by Reclame Fossielvrij and environmental lawyers from ClientEarth, argue that KLM’s advertising campaigns and “compensation” schemes violate European consumer law by giving a false impression about the sustainability of its flights and its plans to tackle climate breakdown.

KLM was notified of the lawsuit on the same day as the firm’s annual general meeting.

The group was not immediately available to comment when contacted by CNBC.

Just as the fossil fuel industry is using greenwashing to protect their license to operate, the aviation sector is using misleading advertising to protect its license to grow.

Johnny White

Lawyer at ClientEarth

“KLM’s marketing misleads consumers into believing that its flights won’t worsen the climate emergency. But this is a myth,” said Hiske Arts, campaigner at Fossielvrij NL.

“We’re going to court to demand KLM tells the truth about its fossil-fuel dependent product. Unchecked flying is one of the fastest ways to heat up the planet,” Arts said. “Customers need to be informed and protected from claims that suggest it is not.”

Climate litigation has notched a number of notable wins in recent months, with a dramatic increase in cases seen targeting a wider variety of private sector and financial actors.

The greenwashing case against KLM is thought to be the first corporate lawsuit about airlines and net zero — and one of the first cases about carbon offsets.

As a result, it has effectively put the global aviation sector on notice.

Why is KLM-facing legal action?

At the crux of the lawsuit is KLM’s so-called “Fly Responsibly” campaign. This is described as KLM’s “commitment to taking a leading role in creating a more sustainable future for aviation” and presents the airline as on track to reduce emissions to net zero by the middle of the century.

The environmental groups launching the legal action say the lawsuit will argue these claims are “highly misleading” because KLM’s plan for a continual increase in flying is at odds with the urgent action necessary to secure a liveable future.

Aviation is one of the most energy-intensive forms of consumption, and both passenger demand and cargo volumes are set to rise in the coming decades. This increase is likely to see the aviation sector in growing conflict with global decarbonization goals.

Since merging in May 2004, Air France-KLM has become one of Europe’s largest airlines.

Koen Van Weel | Afp | Getty Images

The world’s leading climate scientists have repeatedly warned that rapid and large-scale emissions reductions across all sectors will be necessary to avoid the worst of what the climate crisis has in store.

Some airlines have touted the ability of sustainable aviation fuels to help reduce the industry’s environmental footprint, with the CEO of Airbus hailing hydrogen planes as the “ultimate solution” for the mid and long term.

Research published in March by the campaign group Transport & Environment, however, shows that the aviation sector cannot align with net zero and minimize its climate impact without slashing the number of flights.

“While climate experts warn we need to reduce air traffic to keep a just and liveable world within reach, KLM and the airline industry are continuing to focus on growth at any cost and lobbying intensively against climate regulation,” Johnny White, lawyer at ClientEarth, said in a press release.

“It’s now or never for climate action. Airlines cannot be allowed to compete for business on claims that they are tackling the climate crisis, when the reality is they are fueling it.”

Since merging in May 2004, Air France-KLM has become one of Europe’s largest airlines. Together, the two airlines carry approximately 77 million passengers per year.

Air-France KLM on Tuesday launched a 2.26 billion euro ($2.4 billion) share sale in a bid to strengthen the firm’s balance sheet and repay some French state aid. CEO Ben Smith said the move was part of the firm’s desire to bolster its financial autonomy and regain strategic and operational flexibility.

“As the recovery continues and our economic performance recovers … we want to be in a position to seize any opportunity in a changing aviation sector and to be able to accelerate our environmental commitments,” Smith said in a statement.

Shares of Air France-KLM traded more than 13% lower on Tuesday afternoon. The firm’s stock price is down around 2% year-to-date.

Carbon offsets

Together with Air France-KLM and Air France, KLM pledged in October last year to bring its carbon emission reduction targets in line with the landmark Paris Agreement.

The world’s governments agreed in the 2015 Paris climate accord to limit global heating to well below 2 degrees Celsius and pursue efforts to limit the temperature rise to 1.5 degrees Celsius.

The environmental groups targeting KLM also note the firm’s “Fly Responsibly” campaign includes offers for customers to buy a carbon offset product, referred to as “CO2ZERO.” This is a voluntary service to help KLM’s customers reduce their impact by paying toward projects or KLM’s purchase of biofuels.

They argue these products do nothing to limit the damage that the airline industry causes to the climate and that promoting these products to customers undermines urgent climate action.

To be sure, just 1% of the world’s population has been found to cause 50% of commercial aviation emissions.

“Flight emissions cannot be ‘compensated’ if customers just pay extra to plant trees or give money towards the cost of false solutions like what the industry calls ‘sustainable aviation fuels.’ With these messages KLM continues to throw sand in our eyes,” Fossielvrij NL’s Arts said.

“Just as the fossil fuel industry is using greenwashing to protect their license to operate, the aviation sector is using misleading advertising to protect its license to grow,” ClientEarth’s White said. “We need legislation to finally put an end to these delaying tactics for good.”

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