Over the past two years, the world of carbon offsetting has entered a new era—one defined by legal scrutiny, public demand for accuracy, and a deeper understanding of how complex carbon accounting truly is. This shift reflects a growing expectation that environmental claims must be both scientifically credible and communicated with absolute precision.

Close-up of a water droplet on a tree with a modern city in the background. AI generated picture.

For companies, this makes offsetting decisions more complex. The combination of carbon offsetting litigation and widespread challenges around greenwashing in carbon offsets shows that customers, regulators, and judges are no longer satisfied with vague promises or high-level pledges. They want clarity. They want evidence. And—most importantly—they want honesty. Carbon offsetting is a powerful tool, but only when companies understand what it can do, what it cannot do, and how to talk about it truthfully.

This is where your sustainability partner matters. Many misleading claims do not originate from malice but from oversimplification, poor guidance, or a desire to mirror competitors’ messaging rather than reflect scientific reality. A responsible partner doesn’t just deliver carbon credits; they help companies understand the nuance, boundaries, and expectations. And when a partner fails in that duty, the consequences can be severe, as recent legal cases demonstrate.

In this blog, we examine what these cases reveal about the current landscape. We start by looking at several high-profile lawsuits—from Lufthansa and Adidas in Germany, to British American Tobacco, to Mondelez, to Apple. Each case highlights a different source of risk: unclear communication, questionable additionality, misinterpreted certification labels, or misunderstandings around permanence. From there, we explore the shared patterns behind these disputes and what they mean for the voluntary carbon market. Finally, we outline the key lessons companies need to apply—how to communicate responsibly, how to ensure the integrity of your carbon credits, and how the right sustainability partner can help you avoid the pitfalls that have brought others into court.

This blog is meant to shed clarity on questions businesses naturally have when it comes to carbon compensation. Because in a market under legal and public scrutiny, credible environmental action depends on precision and truthfulness. And the companies that understand this—who anchor their environmental claims in transparency and scientific evidence—are the ones who will help build a market that lasts.

Case study round-up: What the courts say

Around the world, civil society and judges are taking a closer look at how companies communicate their environmental claims. These cases do not challenge the principle of carbon offsetting itself—they challenge the way it is presented, framed, and understood. Each ruling, dismissal, or ongoing lawsuit offers insight into the expectations placed on companies today and, just as importantly, highlights the areas where misunderstandings most often occur.

Rather than treating these cases as isolated incidents, it is more useful to view them as markers of a global trend: a demand for greater accuracy, clearer communication, and stronger alignment between sustainability messaging and measurable environmental action.

The case studies below illustrate the different legal questions emerging across jurisdictions, each revealing a specific pressure point within the voluntary carbon market:

• When is a climate-neutral claim considered too vague?
• How should companies communicate the role of offsets versus reductions?
• How much responsibility lies with the company versus the certification body?
• And what happens when the underlying science or project data is misunderstood or oversimplified?

By examining these developments, companies can better understand where risks originate—not from using carbon credits, but from miscommunicating them. This section lays the groundwork for the lessons that follow.

1. Lufthansa & Adidas (Germany): When vague claims backfire

The lawsuits brought against Lufthansa and Adidas in Germany highlight one of the clearest patterns emerging in carbon offsetting litigation: claims fail not because companies intend to mislead, but because the communication is incomplete, ambiguous, or leaves too much room for interpretation.

In the Lufthansa case, the court examined how the airline presented its ‘offset flight’ option to customers. The issue was not the use of carbon credits itself, but the lack of clarity around what was being compensated, to what extent, and how this related to a specific flight. Customers were left uncertain about whether their contribution offset the full environmental impact of air travel or only a portion of it. The court emphasised that when consumers are asked to pay extra for an environmental benefit, they deserve explicit, accessible information about what that benefit entails.

Source: www.lufthansa.com 

Adidas faced a similar communication challenge. The company advertised that it aimed to become ‘climate neutral by 2050’, yet the court found that the claim lacked concrete detail beyond 2030. The message itself was aspirational, but without a clear pathway or intermediate milestones, it risked being interpreted as a firm guarantee. As the court noted, such high-level claims can significantly influence purchase decisions, which places an even greater responsibility on companies to communicate them accurately.

Read more: The power of sustainability: Why investing in sustainability drives faster company growth

The court ruling is not final. Yet, both cases show that the core issue is vagueness—not deception. When a company makes broad nature-related statements without breaking down the specifics, consumers may reasonably assume more is being promised than the company intends. For brands operating in an increasingly regulated space, this is where legal and reputational vulnerability emerges.

What these rulings make clear is that transparency and specificity are no longer optional. It is not enough to state an environmental ambition or provide an offset option; companies must explain the underlying mechanics in a way that reflects scientific reality and provides a truthful picture of what is—and isn’t—being achieved. As we move through additional case studies, this theme will appear again and again.

2. British American Tobacco: The ‘would have happened anyway’ argument

The case involving British American Tobacco (BAT) in the United States brings forward one of the most debated—and often misunderstood—concepts in carbon markets: additionality. The plaintiffs argue that the emissions reductions from the carbon projects supporting BAT’s ‘carbon neutral’ vape claims ‘would have occurred anyway,’ and therefore should not have been used to justify a neutrality label. This argument goes to the heart of what courts, consumers, and regulators are increasingly scrutinising: whether the underlying environmental impact of a project is genuinely attributable to the purchase of a carbon credit.

Read more: Exploring carbon credit certification and issuance

BAT has firmly denied the allegations, pointing to independent verification by Verra and other third-party auditors as evidence that their claims were grounded in recognised certification standards. The company has also highlighted the role of expert carbon offset providers in sourcing, verifying, and facilitating the credits used. Meanwhile, the plaintiffs continue to argue that the projects themselves were ‘illegitimate’, creating a dispute centred around whether the quality and impact of those credits met the level implied by the marketing claims.

This case illustrates how questions around additionality and permanence can evolve into legal disputes when consumers feel the underlying mechanics were not clearly explained. Carbon projects—particularly forestry projects—are complex by nature. They involve long timelines, natural variability, and region-specific considerations such as land tenure, forest management practices, and risk of reversal. When these complexities are reduced to a single phrase like ‘carbon neutral’, misunderstandings become almost inevitable.

The BAT lawsuit also highlights a rising trend: Courts are being asked to interpret scientific judgments that were historically left to carbon registries and technical experts. This raises challenges for both plaintiffs and defendants, especially when multiple jurisdictions treat claims differently, as we see across global cases.

Read more: Who’s who in the carbon market: Key institutions and frameworks and what they do

What makes this case especially instructive for companies is not the allegation itself, but the fact that it centres on perceived gaps between what the credits delivered and what the public understood from the marketing. As the case moves through motions to dismiss, mediation timelines, and potential certification as a class action, one lesson becomes clear: Companies must ensure that their environmental claims reflect both the scientific nature of carbon projects and the expectations of the audience reading them.

3 Mondelez: When a claim indeed is clear enough

In contrast to many of the other cases, the lawsuit against Mondelez in the United States offers an important counterexample—one where the court concluded that the company’s environmental claim was not deceptive. This ruling underscores a crucial point for businesses navigating the evolving landscape of environmental communication: precision works.

Source: https://www.mondelezinternational.com 

The dispute focused on the ‘climate neutral’ label displayed on certain Clif Kid products. The plaintiff argued that the label was misleading because it relied on carbon offsets, which she claimed suffered from ‘fundamental flaws’ in the carbon market. However, the court made a key distinction. It found that Mondelez did not claim the product was inherently or absolutely climate neutral. Instead, the packaging clearly stated that the product was ‘climate neutral certified’—a specific phrasing indicating third-party verification.

This difference was decisive. By explicitly referring to certification rather than asserting an absolute environmental state, Mondelez communicated its claim in a way that aligned with the information consumers could reasonably expect to rely on. The judge emphasised that the label described the certification process truthfully, and it was that accuracy that protected the company from allegations of deception.

The ruling highlights a valuable lesson: environmental claims do not need to be avoided—they need to be correct and contextualised. When companies are precise about what their claim means, who verified it, and how it was achieved, courts are more likely to view the communication as transparent and fair. In this sense, the Mondelez case serves as a reminder that certification standards matter and that using them accurately can provide clarity for consumers and protection for brands.

Just as importantly, this case shows that disputes often arise not from the use of carbon credits, but from how they are framed. When claims are specific, supported by evidence, and tied to verifiable standards, the legal risk diminishes significantly. This stands in sharp contrast to cases where broad, open-ended statements leave the door open to misinterpretation.

Mondelez’s experience is therefore a useful indicator for companies seeking to navigate the fine line between communicating environmental progress and avoiding overstated promises: the clearer the claim, the stronger the foundation.

4 Apple: The buffer pool dilemma

The ongoing cases involving Apple reveal one of the most technically complex aspects of carbon markets: permanence. Unlike most corporate environmental claims, which focus on emissions, reductions, or certification pathways, Apple’s situation touches the core of how forestry projects handle long-term risk. And the legal responses to that risk have diverged across jurisdictions, illustrating just how differently courts interpret the same scientific mechanisms.

In the United States, Apple has argued that the Verra buffer pool—an insurance-like reserve of carbon credits meant to cover unexpected losses in land-based projects—is ‘more than sufficient’ to address any uncertainties within the projects from which it sourced credits. From this perspective, the buffer system provides a credible safeguard, and the company maintains that its carbon claims were grounded in recognised certification and verification standards.

Source: https://www.apple.com 

However, in a parallel case in Germany, the court issued a contrasting opinion to the one made by Apple. The court questioned whether the buffer pool was adequate to guarantee permanence if certain land leases were not extended beyond 2029. The court suggested that simply relying on buffer credits may not fully compensate for long-term uncertainty. This does not imply that the projects lack integrity; rather, it shows that different courts interpret the concept of permanence through different legal lenses.

Read more: Aligning with CSRD: the smart move for future-proofing your business

These divergent views highlight a core truth: Permanence is integral to nature-based solutions, but it is also one of the most challenging concepts for non-experts to understand. Forests grow, evolve, and face natural and socio-economic risks. Registries account for this through buffer pools, monitoring, and verification cycles—systems designed by experts to manage uncertainty. Yet, when such mechanisms are reduced to broad claims like ‘carbon neutral’, the nuance can be lost.

Apple’s case shows that even when companies follow established standards, the way these standards are communicated matters. Courts are increasingly looking not only at the technical validity of carbon credits but at whether consumers were given a clear, realistic understanding of what those credits represent. If there is any perceived disconnect between what the credit guarantees and what the company implies, scrutiny follows.

This situation is not a verdict on the value of buffer pools or nature-based projects. It is a reminder that companies must explain the limits and mechanics of these systems transparently, acknowledging that carbon offsetting involves both scientific rigour and natural variability. As legal precedents continue to unfold, the Apple case reinforces the same lesson emerging across all jurisdictions: Accuracy in communication is as essential as accuracy in carbon accounting.

The common thread: Why these lawsuits matter to everyone

Across all the recent cases—from Germany to the United States—a consistent theme emerges: The disputes do not question whether carbon offsetting works, but whether companies communicate it responsibly. Every lawsuit, whether dismissed or still ongoing, stems from the same issue: a complex scientific system being reduced to language that is too broad, too simplified, or too easy to misinterpret.

Carbon markets rely on detailed methodologies, long-term monitoring, probabilistic modelling, land-management commitments, and independent verification cycles. Concepts such as additionality, permanence, leakage, and buffer reserves cannot be fully captured in a single phrase like ‘climate neutral’. When those nuances are condensed into over-simplified claims, the gap between consumer expectations and scientific reality widens—and it is in this gap that legal and reputational risks arise.

Reputationally, consumers today expect clear explanations. They want to know what is being offset, how it is measured, and which standards apply. When this information is missing, trust erodes—not only in the company making the claim, but in carbon offsetting as a whole.

Regulatorily, authorities are tightening the rules. What previously passed as optimistic marketing language is now scrutinised under the lens of corporate carbon offset compliance, especially in the EU and the US. Environmental communication is no longer a branding choice; it is a compliance obligation.

Market-wise, publicised lawsuits risk creating the false impression that carbon credits are inherently unreliable. In reality, the cases target communication practices—not the legitimacy of high-quality projects. This is a sign of a maturing market that expects greater clarity and accountability.

Finally, the rising voluntary carbon market legal risk affects companies of all sizes. Any organisation making environmental claims must ensure that those claims reflect scientific reality, certification standards, and the actual scope of emissions addressed.

Read more: The next carbon standard: What CBAM and CSRD mean for European businesses

Taken together, these developments reinforce a simple truth: responsible carbon communication requires the same precision as responsible carbon accounting. Companies that acknowledge complexity, communicate boundaries honestly, and rely on transparent certification frameworks are far better equipped to navigate this increasingly vigilant landscape. In a market where trust is everything, precision and truthfulness are no longer advantages—they are requirements.

The EU’s Green Claim Directive: What companies need to prepare for

While recent lawsuits highlight how easily environmental claims can be misunderstood, the regulatory landscape in Europe has been moving in the same direction: toward stricter, evidence-based climate communication. One of the most important developments is the EU’s Green Claims Directive (GCD). 

Originally introduced to curb widespread greenwashing, the GCD responded to a worrying trend: about 40% of environmental claims could not be backed by data. The Directive was published in March 2024 and needs to be incorporated into national law by all EU states by March 2026. For companies, the GCD provides a clear blueprint for what environmental communication will look like across Europe in the coming years.

Key requirements businesses must prepare for

• Environmental claims must be scientifically proven.
  No more ‘eco-friendly,’ ‘green,’ or ‘climate friendly’ without hard evidence behind them.
• Every claim must be backed by robust, science-based substantiation.
  Companies will need measurable data, clear methodologies, and documented reasoning for every environmental statement.
• Independent verification becomes mandatory.
  Before a claim can appear on packaging, websites, ads, or corporate messaging, an accredited third party must verify that the claim is accurate.
• Life-cycle assessment (LCA) becomes the gold standard.
  Statements like ‘carbon neutral,’ ‘low-impact,’ or ‘made with recycled material’ require full LCA proof—not assumptions, offsets, or partial data.
• Offset-based neutrality claims are no longer acceptable.
  Under the GCD, claims like ‘carbon neutral product’ or ‘CO₂ neutral certified’ are misleading if they rely solely on carbon offsets rather than actual lifecycle emissions reductions.
• Companies must keep detailed documentation ready for inspection.
  Authorities and consumer groups will be able to request proof at any time.
• Consumers gain stronger rights.
  The directive aims to restore trust by ensuring that every ‘green’ claim is verifiable, comparable, and meaningful.
• The rules apply to all companies selling in or into the EU.
  Even non-EU businesses must comply if their products reach EU consumers.

Read more: Carbon footprint offsetting strategies: How leading companies neutralise their emissions

Lessons for companies: What responsible offsetting actually looks like

The cases outlined, along with GCD considerations, make one thing unmistakably clear: responsible carbon offsetting is not just about buying credits. It is about understanding the technical foundation behind those credits and communicating that foundation with accuracy. Companies that succeed in this space do so by treating environmental claims with the same rigour they apply to financial or regulatory disclosures.

Environmental claims should say exactly what’s being addressed. That means spelling out which emissions are included, how you calculated them, and which standards you used. When the language is plain and specific, there’s far less room for confusion or misinterpretation.

Third-party labels only help when they’re used accurately. Referencing recognised standards gives people a clear picture of what a claim means—and keeps companies from unintentionally overstating their climate impact.

No company should make environmental statements without knowing the quality of the credits behind them. That means checking additionality, permanence, project integrity, and monitoring practices. Solid due diligence—ideally with expert support—ensures the credits deliver real benefits to nature and can be communicated with confidence.

Offsetting works best alongside emissions reductions and internal improvements. When companies show how these pieces fit together, their climate strategy becomes both more credible and more aligned with what regulators now expect.

Read more: What business leaders need to know before buying carbon offsets

In practice, responsible offsetting is neither burdensome nor complex. It simply requires precision: knowing what the credits deliver, articulating that accurately, and avoiding the temptation to simplify a scientific process into a marketing slogan. This approach not only reduces legal exposure—it strengthens trust, protects reputation, and contributes to a more mature and transparent carbon market.

The role of a responsible offset partner

If there is one lesson that resonates across all the recent legal cases, it is that companies cannot—and should not—navigate the complexity of carbon markets alone. Offsetting is a technical discipline, not a marketing function. It demands scientific understanding, rigorous project evaluation, and a commitment to truthful communication. This is precisely where a responsible sustainability partner becomes indispensable.

At Green Earth, this responsibility is the foundation of everything we do. We do not treat carbon credits as marketing tools. We treat them as nature conservation tools—each with its own methodology, monitoring requirements, risks, and boundaries. Our role is not to offer shortcuts or sweeping neutrality labels, but to guide companies through the reality behind the numbers. That means helping you understand what your credits deliver, what they do not, and how to articulate that difference with clarity and integrity.

Where many of the companies involved in recent lawsuits struggled was not in their intention, but in their communication. Green Earth can help you prevent that disconnect. As an end-to-end carbon project developer, we oversee every stage of our projects—from design and implementation to monitoring and verification and ultimately carbon credit issuance and sale—which allows us to offer the highest level of quality, transparency, and accountability in every credit we bring to market. We specialise in the precision that courts now expect: transparent methodologies, credible project selection, and truthful framing of both impacts and limitations. 

Green Earth team member checking the condition of a tree at the Hongera Reforestation Project site. Hongera Reforestation Project, Green Earth.

More importantly, we help companies frame their carbon compensation within a broader sustainability strategy. Carbon credits are most effective when paired with internal reductions and long-term environmental planning. Our guidance ensures that companies communicate this balance transparently, avoiding the pitfalls of oversimplification that have brought others into court.

In an era defined by scrutiny, responsible environmental action requires a partner who does not overlook complexity but embraces it. Green Earth is that partner. We bring scientific rigour, transparent communication, and full integrity to every project and every client. And as the landscape continues to evolve, it is companies that choose this level of responsibility who will remain credible, trusted, and ahead of regulatory expectations.