Apple Faces Class-Action Lawsuit Over Purchasing Fake Carbon Credits

Apple faces a class-action lawsuit over "greenwashing" practices, with the lawsuit alleging that the company made "false and misleading" claims about the environmental sustainability of three smartwatches (as the company's first carbon-neutral products) launched in September 2023.

The legal action was filed on February 26 in the U.S. District Court for the Northern District of California, seeking compensation from Apple for the price premium consumers paid for these products, including the Apple Watch Series 9, Apple Watch SE (2nd generation), and Apple Watch Ultra.

Apple marketed these products along with updated Apple Watch models as carbon neutral. The lawsuit, brought by lawyers representing seven watch buyers, claims they paid a premium due to the carbon-neutral claims, highlighting consumer interest in companies leading in emissions reduction and the risks involved in incorporating carbon-neutral claims into marketing campaigns.

Marissa Rosen, founder and principal of Climate Social, a climate social consultancy, said, "From a social media perspective, companies like Apple need to be cautious when publicizing their efforts — but consumers do want to know that these companies are making concerted efforts to make an impact in terms of climate and technology."

The math behind Apple's carbon neutrality claim
Approximately 75% of the emissions reductions claimed by Apple for its watch’s carbon neutrality come from production changes, such as using renewable energy, incorporating at least 30% recycled materials into components, using fiber packaging, and altering shipping methods to avoid air freight. However, the rest of the claim is achieved through the purchase of carbon offsets.

This class action lawsuit alleges that the carbon offsets purchased by Apple from two nature-based projects, the Chyulu Hills Forest Conservation project in Kenya and the reforestation initiative in China, are invalid because they "failed to provide real, additional carbon reduction."

While the latter project was verified by the certification body Verra, the lawsuit points out that Verra suspended the issuance of new offsets in November pending an investigation.

"Third-party certifications do not relieve marketers of the obligation to ensure that all reasonably conveyed claims based on those certifications are substantiated," the plaintiffs state. "Apple assured that its investments would generate 'high-quality carbon offsets,' and should have independently verified that the projects met the basic requirement of additionality."

Apple pushes for carbon neutrality across all products
Cupertino, California-based Apple declined to comment on the lawsuit but stood by its statements. "We are proud of our carbon-neutral products, which are the result of industry-leading innovation in clean energy and low-carbon design," Apple said in a statement. "We have reduced emissions from the Apple Watch by more than 75%, and we are making significant investments in nature-based projects to remove hundreds of thousands of metric tons of carbon from the atmosphere. This kind of innovation and progress is crucial for us and the planet, so we prominently and transparently showcase our efforts to our users."

Apple has committed to achieving carbon neutrality for all of its products by 2030. In addition to the watch, it also claimed that the Mac Mini, launched in October, is a carbon-neutral product. Over 50% of the materials in the product come from recycled sources, and all components are manufactured by suppliers who have committed to using clean energy in their production processes.

How to guard against 'greenwashing'
Daniel Cherin, an attorney and founder and president of North Coast Strategies, a firm specializing in reputation management, noted that lawsuits over corporate environmental claims are becoming increasingly common. For example, in early February, the manufacturer of Gore-Tex was sued by consumers for still using perfluorinated compounds (PFAs) while claiming to be "environmentally friendly."

Many U.S.-centered class actions related to "greenwashing" have ultimately been dismissed, such as a similar complaint against clothing manufacturer Lululemon that was dismissed on February 18.

Cherrin offered the following advice to companies:

Do not use vague terms like "carbon neutral" unless verified under a respected and independent framework
Ensure statements are backed by specific data
Assess risk exposure and prepare for scrutiny
Advocate for global standards
“Prioritize transparency over perfection,” said Cherrin. “Sustainability is a long-term process. Companies should showcase their investments in green solutions, technological improvements, and decarbonization—but avoid overpromising.”