States Are Cracking Down on False Environmental Claims

Greenwashing litigation and regulatory enforcement have surged since 2024, shifting from a reputational risk to a major legal liability. Courts and regulators increasingly target specific, quantifiable claims such as “carbon neutral,” “recyclable,” and “100% renewable” when they are not backed by evidence. Even such vague claims as “climate smart” or the use of a “sustainability leaf” icon have put companies in the crosshairs of greenwashing claims.

California leads in anti-greenwashing regulation, but other states actively use Attorney General (AG) enforcement actions to combat misleading environmental marketing. At the same time, red states are weaponizing antitrust litigation against corporate “green” pacts. Companies need a multipronged legal and compliance strategy to navigate these conflicting mandates.

What Is Greenwashing?

Greenwashing is a deceptive marketing practice in which a company falsely portrays its products and services as environmentally friendly. It tricks eco-conscious consumers into supporting businesses that may actually be harming the planet.

Many companies use terms such as “natural,” “eco-friendly,” “green,” or “sustainable” without providing proof. They also design packaging with green colors, leaves, animals, or landscapes to evoke a sense of environmental responsibility. Official-looking logos, stamps, or self-made labels imply third-party certification when no independent audit has occurred.

Another common tactic is highlighting a minor eco-friendly attribute while ignoring massive negative impacts. Companies may also tout an environmental achievement that is legally required anyway.

Environmentalist Jay Westerveld coined the term greenwashing in 1986. While visiting a hotel, he noticed a plaque asking guests to reuse towels to “save the environment.” Westerveld realized the hotel was simply trying to cut costs while framing the decision as an act of global citizenship. Today, greenwashing has expanded to massive advertising campaigns.

Battling Greenwashing Without Anti-Greenwashing Laws

Progressive states have been combating greenwashing for more than 35 years, long before the term entered the mainstream. Without specific greenwashing laws, they relied on generic consumer protection, false advertising, and unfair trade practice laws.

For example, California regularly used its unfair competition law to sue companies making unprovable claims about plastic degradability and nontoxic household cleaners. New York used its unique and powerful Executive Law § 63(12) to force companies to withdraw vague “environmentally safe” claims by threatening corporate freezes.

In the 2010s, corporate greenwashing shifted from simple product packaging to massive, institutional PR campaigns regarding carbon footprints. Progressive states also shifted their litigation strategies.

States began suing fossil fuel conglomerates, alleging that their multimillion-dollar advertising campaigns promoting “clean energy transitions” were actively deceptive. AGs also argued that these greenwashed PR campaigns harmed citizens by delaying real environmental action, constituting a public nuisance and violating fraud statutes.

California Laws Combating Greenwashing

State-level anti-greenwashing legislation and regulations are now shifting from consumer protection laws into aggressive disclosure mandates. Because federal action has faced significant delays, states have stepped in to create their own legal frameworks. These rules target not just false claims but vague terminology, omissions, and lack of corporate transparency.

California leads the nation in anti-greenwashing legislation. The state has passed strict transparency laws that effectively apply to any major company doing business there.

Greenwashing Laws in California Include:

• The Voluntary Carbon Market Disclosures Act (AB 1305) targets corporate greenwashing explicitly. It forces public and private companies to publish detailed disclosures on their websites verifying any claims related to greenhouse gas emissions. Companies must reveal the methodology, data, and third-party verification used to support their claims. Noncompliance carries civil penalties of up to $500,000 per day.
• The Climate Corporate Data Accountability Act (SB 253) requires certain corporations doing business in California to publicly disclose their greenhouse gas emissions. This includes Scope 1 (direct), Scope 2 (indirect energy), and critically, Scope 3 (supply chain) emissions, which can account for more than 90% of an organization’s carbon footprint. It applies to U.S. corporations, both public and private, with more than $1 billion in revenue. The first-year reporting deadline for Scope 1 and Scope 2 is August 10, 2026. The initial deadline for Scope 3 will begin in 2027.
• The Climate-Related Financial Risk Act (SB 261) requires certain businesses to publicly report their climate-related financial risks and mitigation strategies. It applies to companies doing business in the state with more than $500 million in revenue. SB 261 reporting is voluntary due to ongoing litigation. If fully reinstated, failure to file an adequate report could lead to administrative penalties of up to $50,000 per reporting year.
• The “Truth in Recycling” Law (SB 343) requires companies to prove a product is widely collected and successfully processed in real-world California recycling facilities before using the “chasing arrows” recycling symbol or making recyclability claims on packaging. Vague claims such as “eco-friendly” are heavily restricted. Enforcement begins for all items manufactured after October 4, 2026.

States File Anti-Greenwashing Lawsuits

A flurry of state anti-greenwashing litigation has further shifted the legal landscape for U.S. corporations. Because the federal government has failed to issue binding rules due to gridlock and deregulatory policies, state AGs have stepped into the vacuum.

A coalition of 16 state AGs launched a coordinated investigation into tech giants. The states allege that these companies claim to run “100% renewable energy” operations when they rely heavily on unbundled Renewable Energy Certificates (RECs) — essentially buying the rights to green energy they did not generate or use.

States are also penalizing everyday greenwashing. For example, the Arizona Attorney General secured a consent judgment and financial settlement against a major consumer manufacturer. The AG proved the company’s “recycling” bags featured misleading imagery that induced eco-conscious consumers to pay a premium for items that were nonrecyclable in Arizona.

Several states have filed high-profile climate and deceptive marketing lawsuits against fossil fuel titans. State and federal courts have rejected corporate motions to dismiss. State AGs thus have the green light to proceed with trials in which they will argue that “clean energy transition” ads constitute systemic corporate fraud.

However, this is a multifront war. While blue states are suing companies for exaggerating their eco-credentials, red states are using federal and state antitrust laws to target companies that collectively try to reduce their environmental impact.

The Executive Compliance Bottom Line

These state actions have created a high-risk, fragmented regulatory minefield for corporate compliance officers. In blue states, companies face the potential of massive fines, mandatory packaging overhauls, and public retractions. In red states, they face treble damages for “colluding” to reduce plastic or fossil fuel usage, with a high likelihood of public scrutiny even if the risk of legal liability is low.

To navigate these legal crossfires, companies are adopting a cautious, bifurcated legal strategy known as “greenhushing.” Instead of abandoning their climate goals, companies are changing how they talk about them.

The most widespread defensive strategy is to continue implementing sustainability initiatives internally but scrub public-facing marketing. To insulate themselves from right-wing antitrust threats targeting collective climate pacts, companies are reissuing the same sustainability targets as independent corporate policies.

For companies that must release environmental data, marketing teams are being sidelined by compliance teams. Marketing is replaced with raw, verified data. Because the legal risks are dictated by geography, corporations are fragmenting their marketing campaigns based on political borders.

Sustainability Claims Need a Cross-Disciplinary Legal Strategy

Companies face a complex and conflicting legal landscape as they seek to attract eco-conscious consumers and meet corporate sustainability targets. They may want to engage counsel with expertise in environmental regulation, antitrust law, and consumer protection to develop a legal and compliance strategy.

Gain the Foundation Needed to Navigate Environmental Laws and Regulations

Navigating shifting state and federal rules regarding environmental marketing can be difficult — even for companies that are merely supply-chain partners of major corporations. With Purdue Global Law School’s online Executive Juris Doctor (EJD) program, business leaders and professionals can gain a foundation in these laws and regulations, helping them reduce compliance risks.

Purdue Global Law School’s online Juris Doctor (JD) program prepares students for a range of career paths, including traditional legal practice. Graduates of the JD program are academically eligible upon graduation to sit for the California or Connecticut bar or, with an approved petition, the Indiana bar.

Request more information today to find the path that works for you.