Consumer group challenges SK subsidiary for greenwashing with carbon offsets
S. Korean company under fire for using unreliable carbon credits to promote product as “carbon neutral,” signaling growing legal risk around greenwashing in the country
October 27, 2022 – Consumer organization Consumers Korea and environmental group Solutions for Our Climate are taking legal action against carbon offsetting marketing by SK Lubricants, a subsidiary of South Korea’s second-largest conglomerate SK Group, through the Korea Fair Trade Commission.
“We want to raise the alarm about a major company greenwashing its fossil fuel product as carbon neutral,” said Myung Yoon, the Secretary-General of Consumers Korea. “Companies must transparently disclose information about their emissions so that consumers can choose truly carbon-neutral products. To stop further misleading of consumers, authorities must enact relevant regulations and governance.”
The legal dispute comes on the heels of a series of challenges against global companies for greenwashing via carbon credits. Last year, Shell was ordered to halt its ads promoting its fuel as “carbon neutral” by customers purchasing carbon offsets.
Carbon offsetting involves buyers paying for emission-reducing projects, such as planting trees, which are to balance out their carbon-emitting activities. A key principle for effective carbon offsetting is additionality, which means that without the carbon market, greenhouse gas reductions would not have occurred.
The legal claim around SK Lubricants centers around the company’s false advertising of its lubricants as achieving “zero carbon emissions” using “high-quality” carbon offsets, and that consumers can join its carbon-reducing efforts by using the products. Despite the company’s claims, the offsets certified by Verra have been criticized as having no additional value to the environment.
“With the lack of regulations or standards around the voluntary carbon market in South Korea, companies are increasingly throwing around carbon neutral claims without directly reducing their use of fossil fuels,” said Jihyeon Ha, a legal officer at Solutions for Our Climate. Discussions around the voluntary carbon market are expected to continue at the upcoming COP27 summit.
SK Lubricants’ carbon credits, certified by Verra, are from the Guanaré reforestation project in Uruguay. Satellite images of the project area indicate industrial practices of pulp plantations similar to other Eucalyptus plantations common in the region. According to the carbon credit agency Renoster, there are already many similar plantations that are “being planted without the incentive of carbon credits.”
The Korean firm touted that the Guanaré project will absorb a total of 7.8 million tons of greenhouse gases in their marketing materials. However, SK Lubricants has only bought carbon credits equivalent to 115 tons of CO2 equivalent issued from the reforestation project.
Earlier this year, South Korea’s Ministry of Environment instructed SK E&S, another subsidiary of SK Group, to correct its misleading language describing LNG from the Barossa gas project as carbon-free. During the annual National Assembly audit session, the environment minister stated that it has requested relevant information from other allegedly greenwashing companies, including SK Lubricants, and will take administrative measures if needed.
“The legal risk for greenwashing is quickly ramping up both globally and within South Korea. Rather than relying on unregulated carbon credits, South Korean companies must direct their financial resources toward robust emission reduction measures,” said Ha.
ENDS.
Solutions for Our Climate (SFOC) is a South Korea-based group that advocates for stronger climate change policies and transition towards a fossil-free society. SFOC is led by legal, economic, financial, and environmental experts with experience in energy and climate policy and works closely with policymakers.
For media inquiries, please reach out to:
Euijin Kim, Communications Officer, Solutions for Our Climate, euijin.kim@forourclimate.org
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