Leading Dutch airline KLM has found itself at the centre of the first corporate lawsuit alleging “greenwashing”, where a company claims its action are more environmentally friendly to the planet than they actually are.

Netherlands-based campaigners Fossielvrij NL, supported by Reclame Fossielvrij and environmental lawyers from ClientEarth, argue that KLM’s “Fly Responsibly” advertising campaigns and “compensation” schemes breached the Dutch implementation of the EU’s Unfair Commercial Practices Directive by giving customers the false impression that its flights would not worsen the climate emergency.

The case highlights the potential risks companies and directors can face when they engage in alleged “greenwashing”. Misleading claims open the way for potentially costly shareholder activist litigation while directors may face enforcement action from regulators and be exposed to the risk of breach of duty claims.

KLM’s campaign was described by the airline as their “commitment to taking a leading role in creating a more sustainable future for aviation”. It suggests the airline as on track to reduce emissions to net zero by the middle of the century if consumers play their part by buying carbon credits and plant trees.

However, the lawsuit claims the offset product that KLM promoted to customers, through which they could donate towards reforestation schemes and sustainable aviation fuels, was unlawful marketing. Expert evidence submitted with the court filing claims KLM could not validly prove that such gestures made any meaningful compensation for the climate impact of flying.

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.

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

ClientEarth currently has 168 active cases tackling  “the most pressing environmental challenge” with the KLM one grabbing the headlines. Johnny White, of ClientEarth, said: “Just as the fossil fuel industry is using greenwashing to protect their licence to operate, the aviation sector is using misleading advertising to protect its licence to grow. We need legislation to finally put an end to these delaying tactics for good.”

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