Holding Oregon Benefit Companies Accountable for Greenwashing and Faux CSR

Authors

Sophia von Bergen

Author Details

Sophia “Sophie” von Bergen, J.D. 2020, Lewis & Clark Law School.

First Page

1097

Abstract

The notion of corporate social responsibility (CSR) has gained popularity in recent years with both consumers and businesses, leading to Oregon and currently 35 other states adopting benefit company statutes that allow companies to elect status as a benefit corporation. CSR, however, can be marred by what is known as “greenwashing” and “faux CSR,” which occur when a company falsely claims that it engages in environmentally friendly or socially responsible practices to boost sales or improve its brand. Oregon’s benefit company statute contains features designed to protect against greenwashing and faux CSR, but the statute’s accountability mechanisms are lackluster. Enforcement proceedings provide remedies for only a narrow class of stakeholders and are otherwise ineffective and perhaps unenforceable. A lack of accountability perpetuates greenwashing and faux CSR and threatens the legitimacy of the CSR movement.

While much has been written about greenwashing and benefit corporations, commentators have paid scant attention to viable causes of action against greenwashing benefit companies. Virtually no literature addresses the potential for Oregon benefit companies to engage in greenwashing or faux CSR, or what causes of action or remedies are available to aggrieved stakeholders. This Note seeks to fill this gap by assessing the potential for greenwashing and faux CSR under Oregon’s benefit company legislation and considering avenues to hold an Oregon benefit company accountable. It analyzes how the enforcement proceeding under the Oregon benefit company statute allows these practices to occur, and proceeds to consider what avenues for accountability are available andto whom under the Oregon Uniform Trade Practices Act, the Federal Trade Commission Act, and the Lanham Act.

Close analysis reveals that these statutes together fail to ensure accountability. Until Oregon’s benefit company statute includes more stringent protective mechanisms, benefit company status may offer companies merely seeking to capitalize on the CSR movement a safe haven from responsibility.

Recommended Citation

Sophia von Bergen, Holding Oregon Benefit Companies Accountable for Greenwashing and Faux CSR, 24 Lewis & Clark L. Rev. 1097 (2020).
Available at: https://lawcommons.lclark.edu/lclr/vol24/iss3/10