Apple’s Carbon Offsets Questioned in Greenwashing Lawsuit
The latest class action against Apple reveals the cracks in corporate sustainability claims and why greenwashing litigation is the best tool we have to hold companies accountable.
A 2024 PwC survey found that more than four-fifths (80%) of consumers are willing to pay more for sustainably produced or sourced goods. From 100% recyclable packaging to ethically sourced materials, green claims have become a powerful marketing tool.
But what happens when those claims don’t hold up?
Apple, one of the world’s most recognizable companies, is facing a class action lawsuit over its Apple Watch carbon neutral claims: Plaintiffs argue that the carbon offset projects Apple relied on to achieve neutrality were essentially meaningless, raising serious concerns about whether carbon credits are being used as a legitimate climate solution or a smokescreen for business as usual.
This case could set a landmark precedent for corporate accountability, but it also exposes a larger issue: the US lacks strong regulations and enforcement tools to effectively hold corporations accountable for their environmental commitments and claims. Because of this gap, greenwashing lawsuits filed by individuals remain one of the few viable options to hold corporations accountable for their green claims.
The case against Apple
As stated in Apple’s 2024 Environmental Progress Report, the tech giant has pledged to reach carbon neutrality across its entire supply chain by 2030. And in September 2023, it introduced the Apple Watch Series 9, SE, and Ultra 2, the first of its products to be marketed as carbon neutral. Apple claimed that it used a combination of lower emissions and carbon offset purchases to achieve this goal.
Now, Apple is being sued over the legitimacy of those claims.
In a complaint* filed on February 26, 2025 in San Jose, California federal court, seven purchasers of the Apple Watch from California, Florida, and Washington, DC, allege that Apple falsely advertised the watch and misled consumers about its carbon neutrality efforts, in which it claimed that it had retired 485,000 metric tons of carbon dioxide equivalents via two key carbon offset projects: one in Kenya’s Chyulu Hills and another in China’s Guinan region, both which allegedly failed to provide genuine carbon reductions.
The plaintiffs argue that had they known the truth, they either would not have purchased their watches or would have paid less for them.
According to the complaint:
“Consumers have suffered economic injury in multiple ways: they paid a price premium based in part on false environmental claims; the deceptive marketing distorted the marketplace by falsely differentiating Apple’s products on environmental grounds; and, consumers did not receive the benefit of their bargain—they paid for watches marketed as environmentally superior but received products whose environmental claims rely on ineffective and redundant offset projects that fail to provide genuine carbon reductions.”
This is a new type of litigation that introduces unique legal arguments, particularly, the evaluation of offset project quality, which has never been legally challenged in this context before in the US. Since this one of the first few times these specific arguments are being used regarding carbon neutrality claims in the US, the court will need to determine if Apple had a duty to check the quality of the offset projects it purchased carbon credits from.
*The Apple case is Dib et al v Apple Inc, US District Court, Northern District of California, No. 25-02043
The carbon credit market has a serious enforcement gap
Carbon offsets are meant to compensate for CO2 emissions created by both private and public sector projects. If offsets truly neutralize emissions, a product can be marketed as carbon neutral.
The problem? Many offsets don’t actually reduce emissions at all. The most essential principle when assessing carbon offsets is additionality, meaning a project must reduce greenhouse gas (GHG) emissions beyond what would have happened anyway.
However, despite the established guidelines below, there is no meaningful enforcement monitoring the carbon credit market and ensuring that companies and governments use high-quality carbon offsets and actually achieve additionality. This gap allows corporations to claim carbon neutrality while relying on offsets that don’t actually reduce emissions.
These are the primary regulations guiding the carbon credit market at the moment:
International guidelines
Both international climate agreements (such as the Paris Agreement) and leading industry standards (such as the Verified Carbon Standard (VCS) and ISO 14068-1) provide guidance for entities aiming to demonstrate carbon neutrality and require substantiation of additionality.
International climate agreements, such as Article 6 of the Paris Agreement and Article 6 of the Kyoto Protocol, also require companies to prove additionality. The Kyoto Protocol states the following:
"Each project must show that the emission reductions it produces are additional to what would have happened without the project. This requirement, ensuring that credits/units are not awarded for emission reductions that would have happened anyway, is called ‘additionality.'"
This criterion is widely agreed upon by key industry standards, including the Verified Carbon Standard (VCS) Program, American Carbon Registry (ACR), and Climate Action Reserve (CAR).
Additionally, the Carbon Neutrality Technology standards provide similar guidance for tech companies: the NQA's Publicly Available Standards (PAS) PAS 2060 and the British Standards Institution's (BSI) ISO 14068-1. Both standards provide guidance at the organizational and product level on how to demonstrate carbon neutrality at the organizational or product level.
US guidelines: The Green Guides
In the US, the Federal Trade Commission’s Green Guides also provide guidance on corporate sustainability claims. The Guides explicitly state that companies must have competent and reliable scientific evidence to support their environmental assertions.
This means that businesses, including Apple, are responsible for ensuring that the carbon offset projects they rely on are legitimate. If a company markets a product as carbon neutral based on offsets, it must verify that those offsets represent real, additional, and permanent emissions reductions.
Greenwashing litigation is the only solution (for now)
Corporations are eager to promote their sustainability efforts, including carbon neutrality, but without strong regulation and enforcement, many can make these claims without real accountability.
While greenwashing litigation is not a direct way to challenge corporate emissions, it has become the primary tool for holding companies accountable for misleading sustainability claims. With no regulatory body consistently enforcing these commitments, false advertising laws, particularly those targeting greenwashing, have become the legal framework for challenging corporate deception.
The Apple case is the latest example of this strategy in action, and the first in the tech arena.
Delta Air Lines also recently faced a lawsuit alleging that its carbon neutrality claims were misleading because they relied on questionable carbon offsets that failed to deliver real emissions reductions. Similarly, Lululemon Athletica Inc. was sued for overstating the environmental benefits of its products, though that case was dismissed due to challenges in proving a direct price-premium impact.
As long as corporations continue to exploit sustainability rhetoric without meaningful environmental action, greenwashing litigation will remain one of the few effective legal tools available to hold them accountable.
Using technology to detect corporate greenwashing
As consumer expectations rise and regulations tighten, companies, like Apple, will no longer be able to make vague, unverified sustainability claims without consequences.
Investigating carbon offset projects requires advanced data analysis and satellite imaging. At Darrow, our AI-powered Legal Intelligence Platform uses these methods and advanced anomaly detection algorithms combined with human insight to uncover potential greenwashing violations that might otherwise go unnoticed. The Platform sifts through vast amounts of public data and clusters and identifies patterns that signal potential environmental risks.
This includes:
- Analyzing carbon offset projects to detect false or exaggerated environmental claims.
- Verifying whether a project actually reduces emissions or is just repackaging existing environmental protections.
- Uncovering greenwashing in forestry projects, corporate supply chains, and carbon credit markets.
Once we’ve detected a greenwashing violation, we partner with plaintiffs’ attorneys to litigate the case. This allows them to focus less on lengthy investigations and more on building strong cases and strategizing the litigation process.
Carbon credits can help us fight climate change. But if companies use them dishonestly, they’re simply a form of corporate deception.
Interested in partnering with Darrow on your next case? Contact us.
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