California Gas Utility Settles With AG After Greenwashing Allegations

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Greenwashing is a deceptive marketing practice used by companies to create the illusion that their products or services are environmentally friendly, sustainable, or socially responsible, when in reality, they may not be. It involves the use of misleading labels, vague or exaggerated claims, or selective disclosure of information to mislead consumers into believing that a company is more environmentally conscious than it actually is.

These tactics can include highlighting a single eco-friendly feature while ignoring other harmful aspects of a product, using terms like “natural” or “eco-friendly” without any substantiation, or relying on green imagery and symbols to create a perception of sustainability.

Greenwashing matters because it undermines consumer trust and hinders the progress towards genuine sustainability. By misleading consumers, companies can divert attention from their actual environmental impact and continue unsustainable practices without facing proper scrutiny. This not only misleads consumers into making uninformed choices but also prevents them from supporting genuinely sustainable brands.

Additionally, greenwashing can lead to a sense of complacency, where consumers believe they are making environmentally responsible choices when, in reality, they are not. By raising awareness about greenwashing and holding companies accountable, consumers can make more informed decisions and drive the demand for truly sustainable and responsible products and practices.

But, a recent story from California makes it clear that greenwashing can also be a criminal act. After all, misrepresenting what you’re selling as something that it really isn’t is called “fraud,” and depending on how badly you make a misrepresentation, it could land someone or their company in serious legal trouble.

SoCalGas Settles With California’s AG

Recently, California Attorney General Rob Bonta reached a settlement with Southern California Gas Company (SoCalGas) regarding multiple misleading environmental marketing claims made by the company in 2019. These claims falsely portrayed natural gas as “renewable,” when in fact, the majority of natural gas, including the gas distributed by SoCalGas, is derived from fossil fuels.

The investigation conducted by the California Attorney General’s office uncovered that SoCalGas made these misleading statements across various platforms, including print, electronic media, informative displays, backdrops, and promotional items.

“SoCalGas is a large, sophisticated entity. While we appreciate its cooperation in our investigation, SoCalGas should have known better than to broadcast unqualified claims suggesting that all natural gas is ‘renewable.’ Truth in marketing matters, and it’s required under state law,” said Attorney General Bonta. “Today’s settlement should send a clear message: The California Department of Justice is committed to holding accountable corporations that mislead or deceive consumers about the environmental attributes of a product.”

Under the settlement, where the company does not admit to fault, SoCalGas will:

  • ol]:!pt-0 [&>ol]:!pb-0 [&>ul]:!pt-0 [&>ul]:!pb-0″ value=”2″>Pay penalties totaling $175,000, with 50% ($87,500) allocated to the California Environmental Protection Agency’s Environmental Justice Small Grants Program for an environmental justice-focused Supplemental Environmental Project (SEP).
  • What Misleading Claims Were Made?

    The Attorney General’s press release was a little light on details, so I went looking elsewhere to see what the specific details were. The settlement itself gave further details, as did a piece at PV Magazine.

    What it comes down to is that methane can be obtained from renewable sources, and SoCalGas did get a portion of its gas from these renewable sources. In 2018, no ‘renewable natural gas’ was sold, despite its claims. By 2022, only 5% renewable gas was provided to residential, small commercial, and industrial customers.

    In 2019, California authorities investigated SoCalGas’s advertising tactics. They found that the company made broad ‘renewable’ marketing claims on informational displays, backdrops, and promotional items such as hats, t-shirts, and notepads. These were widely distributed at around 14 conferences and community events sponsored or attended by SoCalGas.

    One of these events was the Ag Expo, a three-day gathering that drew around 100,000 attendees. SoCalGas showcased an educational and interactive display at the expo. Additionally, the company sponsored a “Heal the Bay” event, offering a photo booth backdrop for attendees.

    In other words, the claims went far, far beyond what the company was actually providing, which was between 0 and 5% renewable gas, and the rest coming from non-renewable sources. The company also failed to mention the climate change effects that come from not only the burning of methane, but also the production of it, where a lot of it leaks directly into the atmosphere, proving to be a potent greenhouse gas.

    SoCalGas refers to its fuel as ‘renewable’ gas, which California’s filing argues is derived mainly from landfills and dairy operations. This biomethane is then converted for use in transportation, resulting in a “net reduction” in greenhouse gas emissions that contribute to climate change.

    But, regardless of whether this source can really be considered renewable, it only constituted a single-digit percentage of the overall supply of gas to customers, so representing all of the gas as renewable was definitely a big stretch.

    It’s important to note that under the terms of the settlement, the company admits to no fault, and has not been found to legally be engaging in fraudulent advertising practices. From what I’ve read, they certainly appear to be fraudulent, but in the legal sphere, these are still strictly allegations and should be treated as such.

    Why This Matters

    I explained this a bit in the beginning of the article, but I want to briefly go over how the problems of greenwashing applies here.

    The thing is, change is hard, and never free. Moving from using methane that’s already coming in the pipes into your home or business to doing something else takes work, effort, and money. Many people will put in at least some work, effort, and money if they think it’s for an important cause, but if there’s no reason to change things, people are understandably hesitant to change.

    When a company selling gas gets away with telling customers that the gas is renewable, it takes away the moral incentive to change to cleaner energy sources. If the gas isn’t hurting the environment, then why buy a new stove, oven, water heater, and furnace? Can’t that money go to a fishing trip or a new TV instead?

    Misleading customers denies them the opportunity to make an informed decision and do what they would do if they had the truth. It takes money from people who deserve it (companies selling better products) and puts it in the hands of liars and thieves instead. Nobody’s coming to their houses and collecting the money at gunpoint, but the overall effect is still the same in the end (minus the trauma of being held at gunpoint, of course).

    So, California’s AG was right to go after the company for this, in my opinion. They were acting no better than a common street thief, but on a larger scale, and hurting everybody’s future in the process.

    Featured image generated by Jasper.AI.

     


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