petition

Instituto Brasileiro de Defesa do Consumidor (IDEC) vs Localiza Rent A CAR S/A. (Disclosure of information and greenwashing) - petition

Litigation

Sabin

Sabin Litigation

Filing Year For Action

On January 23, 2025, the Brazilian Institute for Consumer Protection (IDEC) filed a judicial inquiry against the car rental company Localiza Rent A CAR S/A. This action is part of a set of two inquiries proposed by IDEC alleging greenwashing and problems in the use of carbon credits from the voluntary market. In this case, Localiza is questioned about offering rental services with greenhouse gas (GHG) emissions offsets through its ‘Carbon Neutrality’ and ‘Commitment to the Climate’ programmes. However, IDEC believes that this initiative may constitute greenwashing due to the imprecise origin of the carbon credits, the apparent lack of information on the real benefits, and the effectiveness of the methods used to achieve the stated objectives. IDEC believes that there are indications of greenwashing due to gaps in the information collected through the respondent's website. Furthermore, the offer is not in accordance with consumer law, as it violates objective good faith, as well as the basic consumer right to freedom of choice and adequate and clear information, all of which are provided for in the Consumer Protection Code. The payment of an additional amount in the car rental contract to offset GHG emissions requires justification in order to be considered an offer that complies with consumer rights. However, consumers are misled due to a lack of adequate information and thus believe that the respondent will provide a service that has less impact on the environment. Greenwashing is characterised as unfair practices that downplay risks and threats to socio-environmental rights. Therefore, it is believed that the respondent uses this resource because GHG emission compensation programmes have a positive impact on its image. Firstly, because the service provided would be guided by ESG standards, generating a favourable image for the company. In addition, it reaches a fraction of consumers who base their consumption on social and environmental criteria. The purpose of the Judicial Inquiry is to enable Localiza to provide detailed explanations of its GHG emission compensation practices and to allow the respondent to correct any inconsistencies. The plaintiff requests that documents be provided to prove the veracity of the benefits of the programes offered in the car rental service, as well as that the questions presented about the programmes be answered.