Inside Track: Planning, Environment & Sustainability - In the media, In practice and courts, Cases and Legislation - Real Estate and Construction


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Environmental nonprofit ClientEarth, with support from other
activist groups, has commenced litigation
in a Paris court against a global food-products company. The
claimants contend that Danone has breached France’s Corporate
Duty of Vigilance Law in that the company does not have an adequate
plan to reduce its plastic footprint. Prior to filing the claim in
Paris, ClientEarth served “legal warnings” on Danone and
certain other French companies, including Auchan, Carrefour,
Casino, Lactalis, McDonald’s France, Les Mousquetaires, Picard
and Nestlé France.

The French Corporate Duty of Vigilance Law (Loi de
Vigilance
) came into force in 2017 and requires that companies
with over 5,000 employees in France, or 10,000 employees globally,
prepare, publish and enact a ‘vigilance plan’ corresponding
with the UN’s human rights due diligence procedures on an
annual basis. This plan must include social and environmental due
diligence measures across the company’s entire supply chain.
The law is considered by many legal commentators to be a forerunner
to the EU’s Corporate Sustainability Due Diligence Directive,
which we previously
discussed
.

Danone has “strongly
refute[d]
” the accusations and stated that it
supports a legally binding international agreement that is
currently being negotiated under the auspices of the United
Nations. In March 2022, at a UN Environment Assembly in Nairobi,
Kenya, 175 nations adopted a resolution to end
plastic pollution and develop a related international legally
binding agreement by 2024. The UN resolution covers the full
lifecycle of plastic including its production and disposal.

Rosa Pritchard, a lawyer for ClientEarth, explained the legal
filing, by asserting that: “Danone is trudging ahead without a
serious plan to deal with plastics, despite clear concern from
climate and health experts and consumers, and a legal obligation to
face up to the issue. It continues to rely on single-use plastic
packaging in the hopes that recycling will miraculously deal with
the flood of plastics it puts on the market. But recycling is a
limited solution as only 9% of plastics ever made have been
recycled. It’s unrealistic for food giants like Danone to
pretend recycling is the silver bullet.”

In a response to the legal filing, Danone argued that: “We
are implementing a comprehensive framework of actions aimed at
reducing the use of plastic, developing reuse, strengthening
collection and recycling schemes, and developing alternative
materials. We have already made significant progress on each of
these fronts, particularly on plastic reduction, with, for example,
a decrease of 12% at global level (60,000 tons in absolute) between
2018 and 2021.”

Taking The Temperature: We have discussed how regulators
globally appear to be taking a relatively more aggressive approach
to alleged greenwashing. The type of litigation commenced by
ClientEarth represents a different category of climate-related
litigation or enforcement activity. Pressure groups are actively
seeking to bring claims under newly-established corporate
responsibility and climate-focused legislation to target companies
that are perceived to be failing to address ESG issues or greenwash
practices with an environmental impact. Other examples include
Smith v. Keurig Green Mountain, Inc., 18-cv-6690 (N.D.
Cal. 2018) (claims against Keurig for wrongfully labeling Keurig
pods as recyclable); Dwyer v. Allbirds, Inc., No.
7:21-cv-05238 (S.D.N.Y. 2021) (claiming Allbirds’s statements
concerning its environmental impacts were false and deceptive and
materially misleading); Swartz v. Coca-Cola Co., Case No.
3:21-cv-04643 (N.D.C.A. 2021) (false advertising claims that
Coca-Cola advertised that its single-use plastic bottles were 100%
recyclable). It remains to be seen how effective such litigation
will be in realizing the claimants’ ESG goals. Large companies
like Danone and other organizations typically targeted in these
types of actions already operate within a web of statutory and
regulatory requirements, which often differ across multiple
jurisdictions. In the case of Danone, the company correctly refers
to the UN plastics-reduction initiative. It is not clear that
one-off litigation will have a significant effect given the suite
of regulation that already exists. Nonetheless, we expect these
types of suits be filed with greater frequency in France and other
jurisdictions. To prepare, companies and their directors and
officers should assess, and if necessary, enhance the quality of
their climate-related governance, taking into account applicable
legal and regulatory requirements and industry best practices.
Having sound governance in this area also will enable companies to
quickly and accurately disclose their approaches to climate and
other ESG issues and, if necessary, push back on unsupported
accusations.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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