The Nickel Report

Changing economic and political circumstances are leading some companies to reconsider their sustainability targets.

In recent months, some companies have begun reconsidering their sustainability targets. This trend is influenced by a range of factors, including economic pressures and scrutiny of climate action by the current federal administration and state attorneys general. In addition, many companies with interim decarbonization goals (e.g., companies with “net zero by 2050 goals” that also set 2030 targets) are finding they are not on track to meet them. When considering revising or abandoning existing goals, it is important to consider emerging risks under the current legal landscape, and to develop and follow a deliberate strategy to mitigate those risks.

Litigation challenging corporate sustainability targets is increasing.

There is a growing trend of state attorneys general and environmental non-profits suing to challenge companies’ sustainability targets. Most of these lawsuits have been brought under state statutes restricting unfair or deceptive acts or practices (UDAP) and include allegations that sustainability targets and goals are “misleading,” particularly where companies fail to take concrete steps necessary to meet their targets. Some cases also include common law claims, such as public nuisance, fraud (or fraud by omission), breach of express or implied warranty, unjust enrichment, misrepresentation, and/or product liability (failure to warn). Most of the cases that have been brought to date have either settled or are still pending. Notably:

• Earth Island Inst. v. Coca-Cola Co., No. 2021-CA-001846B (D.C. Sup. Ct.) (Coca-Cola). In 2021, Earth Island Institute (EII) filed a complaint under the Consumer Protection Procedures Act (CPPA) alleging that Coca-Cola’s published targets for recyclable packaging and bottle/can collection initiatives were misleading because the company was not taking the steps necessary to meet its targets. The D.C. Court of Appeals reversed the trial court’s decision granting CocaCola’s motion to dismiss, finding that EII had plausibly alleged that Coca-Cola “misleads consumers into thinking it is serious about hitting the concrete benchmarks it has announced for itself, when in fact its practices show no intention of doing so.”[1] The case was remanded to the trial court and Coca-Cola filed an answer to EII’s complaint in October 2024; the case is still pending.
• New York v. PepsiCo, Inc., No. 814682/2023 (N.Y. Sup. Ct.) (PepsiCo). In November 2023, the New York Attorney General’s Office (NYAG) filed a complaint in state court alleging that Pepsi set targets to reduce virgin plastic used in its plastic beverage bottles, then repeatedly revised the targets as it failed to meet them. NYAG alleged that “PepsiCo’s messaging regarding its use of virgin plastic gives a misleading impression that the company is making meaningful progress toward combatting the problem of plastic pollution, which the company recognizes affects consumers’ decisions about whether to purchase their products.”[2] The trial court granted Pepsi’s motion to dismiss, finding that “promising to reduce its use of plastics does not amount to deception.”[3] NYAG appealed the trial court’s decision in late 2024; the appeal is still in the preliminary stages. 

• People of the State of New York v. JBS USA Food Company, No. 450682/2024 (N.Y. Sup. Ct.) (JBS USA). JBS was previously investigated by the National Advertising Division of the Better Business Bureau (NAD), which recommended that JBS stop making claims related to its net zero target because the company had not developed a clear plan to meet the target. Following the NAD decision, NYAG sued JBS in February 2024. In January 2025, a New York state court granted JBS’s motion to dismiss with leave to amend the complaint. On October 31, 2025, the parties settled the case.[4] The settlement agreement includes allegations similar to those in the NAD case, focusing on JBS’s repeated public statements about its “Net Zero by 2040 commitment” despite its inability to provide tangible evidence that it was on track to meet this target. Under the settlement, JBS agreed to present “Net Zero by 2024” as a “goal” instead of “pledge or “commitment” and to disclose actual steps JBS is undertaking if it represents to be “taking steps” in furtherance of its emissions target. JBS also agreed to undertake a comprehensive internal review of consumer-facing statements regarding its emissions goal and certify compliance to NYAG for the next three years. Finally, JBS agreed to pay $1.1 million to Cornell University to support climate-smart agriculture. 

• Environmental Working Group v. Tyson Foods, Inc., 2024 CAB 5935 (D.C. Sup. Ct.) (Tyson Foods). In September 2024, Environmental Working Group (EWG) filed a complaint against Tyson Foods, asserting claims under the CPPA based on Tyson’s publication of “Net Zero by 2050” claims without a plan to achieve them or take meaningful steps to do so.[5] In February 2025, the Superior Court denied Tyson’s motion to dismiss, finding that EWG had stated plausible claims for relief under the CPPA, in part based upon EWG’s allegations that Tyson’s stated emission reduction target was not just unrealistic, but that “Tyson’s reduction goal is impossible.”[6] Accordingly, the court found that that EWG’s allegations were sufficient to support a claim that Tyson’s net zero emissions campaign is false or misleading to environmentally conscious consumers.[7] In November 2025, the parties entered a settlement wherein Tyson agreed to stop making “Net Zero by 2050” and “climate-smart beef” claims, and not to renew them without verification by an expert mutually agreed upon by the parties.

Companies are also under scrutiny for their involvement with standard-setting organizations.

Recent state attorneys general activity has also raised the specter of investigation and enforcement risk for organizations that assist corporations with setting climate and other sustainability targets, as well as for the corporations that use the services of those organizations.

• In July, the Florida Attorney General announced that his office was investigating CDP (formerly the Climate Disclosure Project) and SBTi. In August, the Iowa Attorney and 22 other Republican AGs sent a letter to SBTi raising concerns related to SBTi services to companies in the financial services and insurance industries. The letter to SBTi suggests that a company’s participation in the SBTi process might create a basis for greenwashing suits based on the allegedly flawed nature of the process. More specifically, the letter indicates that, because the US and other countries are not on track to meet the Paris Agreement’s goals, corporate statements regarding SBTi endorsement of a net zero target as consistent with the Paris Agreement may be misleading. By contrast, in the JBS USA case discussed above, NYAG appears to have considered the company’s withdrawal from the SBTi process in concluding that JBS Foods’ net zero goal was not credible. This highlights the difficult position that companies with climate targets are currently in. The seemingly conflicting approaches highlight that plaintiffs on either side of the political spectrum are likely to scrutinize both climate goals and the methodology for GHG reductions, whether or not the company is engaged with a specific climate goal-setting organization.

• Plastics Initiatives. More recently, in October, the Florida Attorney General, joined by AGs from Texas, Iowa, Nebraska, and Montana, published a letter “calling out several major environmental groups for coordinating with some of the largest corporations in the U.S. to impose anticompetitive recycling practices that potentially violate state and federal antitrust laws.” The letter claims that “the Consumer Goods Forum, the Green Blue Institute, and the U.S. Plastics Pact are hindering states’ economic prosperity by coordinating business behavior, which would constitute violations of Florida’s antitrust laws.”

California’s climate disclosure laws complicate the risk landscape.

California’s climate disclosure laws complicate this landscape by requiring companies to make statements that have the potential to increase their litigation risk. SB 261, codified at California Health and Safety Code Section 38533, requires companies to issue climate-related financial risk reports that disclose climate targets and goals. (Enforcement of this law is currently enjoined as to the members of certain trade associations that are parties to litigation challenging its constitutionality; however, the law remains in force as to other companies.) In addition, AB 1305, codified at California Health and Safety Code Sections 44475, 44475.1, and 44475.2, requires companies that make “carbon neutral,” “net zero,” and “significant reductions in emissions” claims to publish on their websites annual substantiation of these claims, including how interim progress is being measured. These types of laws, intended to promote transparency with regard to companies’ climate-related metrics, targets, and claims, force public disclosures that could potentially attract third-party scrutiny and thus increase legal risk.

Revising sustainability targets requires careful legal strategy.

The current legal landscape makes it imperative for companies to carefully consider any publicly stated sustainability targets and proactively address those that are no longer viable or have been abandoned. When planned initiatives become impossible, or when a company decides it either can no longer meet or does not want to pursue a target, it is important to be transparent about the changes in order to avoid creating a basis for allegations of misrepresentation. Transparency creates its own risks, however, as demonstrated by the PepsiCo case (in which the company successively revised its targets when it failed to meet them) and the JBS USA case (in which the company stated in its sustainability report that it might not meet its target).

Accordingly, when abandoning or revising sustainability targets, companies should carefully consider:

1. Whether the costs and other risks associated with continuing to pursue the target outweigh the litigation and reputational risks of abandoning the target;
2. Where to communicate the change, together with the legal implications of each potential source of disclosure (e.g., 10-K, sustainability reports, company website, etc.); and
3. What to say. It is not enough to communicate that a target may not be met. The company should explain the reasoning behind the shift in strategy, whether a new target is being set, and, if so, why relevant stakeholders can have confidence in the new target.

Hunton is advising clients on these issues. For further discussion, please contact Rachel Saltzman, Clare Ellis, and Roger Gibboni.

[1] See Earth Island Inst. v. Coca-Cola Co., 321 A.3d 654, 661 (D.C. Ct. App. 2024) (quoting the trial court’s opinion).

[2] See PepsiCo, Compl. ¶ 93, Doc. No. 2 (Nov. 15, 2023), available here.

[3] PepsiCo, Memorandum Decision at 16, Doc. No. 39 (Nov. 8, 2024), available here (“[A] representation or a prediction of something which is hoped or expected to occur in the future is not a misrepresentation of fact . . . Plaintiff . . . seeks to create liability for Defendants’ aspirational statements to curtail a plastic footprint. However, Plaintiff has failed to point to any statutory framework from which to impose such a burden or to establish a theory of liability.”).

[4] See JBS USA, Doc. No. 58 (Nov. 3, 2025), available here.

[5] Tyson Foods, Compl. ¶ 1; see also Compl. ¶ 83 (“Tyson’s net zero by 2050 representations are false or misleading because even if Tyson knew what its GHG emissions were, on information and belief, it has not developed a comprehensive and actionable plan to zero them out by 2050—which reasonable consumers would expect, based on Tyson’s claims.”).

[6] Tyson Foods, Order Denying Motion to Dismiss (D.C. Sup. Ct. Feb. 3, 2025) at 9.

[7] Id. at 10.