Analysis of the Iberdrola vs Repsol judgment: first ruling in Spain on greenwashing practices

The ruling by Santander Commercial Court No. 2 on 21 February 2025, dismissing Iberdrola Energía España, S.A.U.'s lawsuit against Repsol Comercializadora de Electricidad y Gas, S.L.U., Repsol S.A. y Repsol commercial de productos petroliferos S.A.(“Repsol”) marks a significant moment in the legal landscape concerning advertising practices and sustainability claims in Spain. The decision serves as a crucial reference point for understanding how the Spanish courts may evaluate advertising practices related to sustainability and could influence future litigation concerning alleged greenwashing.

This case underscores the complexities involved in determining what constitutes misleading advertising, particularly in the context of environmental and sustainability claims. The judgment highlights the importance of clearly defining sustainability and the criteria against which such claims are assessed. Readers will gain insight into the court's interpretation of sustainability, the legal standards applied under the Unfair Competition Act, and the implications for companies making environmental claims in Spain. 

In addition to understanding how courts may evaluate existing advertising practices this case also illustrates the evolving legal framework, particularly in light of recent legislative developments such as the “Empowering Consumers Directive”, which aim to strengthen consumer protection against misleading environmental claims.

The claim filed by IBERDROLA

The claim, brought by IBERDROLA, a competitor of Repsol  was based on  commercial statements on Repsol's corporate website which included expressions such as “an energy company committed to a sustainable world”, “Repsol commitment to Zero Net Emissions 2050”, “We lead the energy transition”, “The fight against climate change is in our DNA” and “We supply sustainable energy products and services”, “We lead the energy transition”, “The fight against climate change is in our DNA” or “We provide sustainable energy products and services” and three advertising campaigns on Repsol's commitment to sustainability and the environment. The claim alleged that Repsol had engaged in misleading, unlawful and unfair advertising practices, in breach of Articles 5 and 7 (in conjunction with Article 18) of the Unfair Competition Act (hereinafter the ‘LCD’).  The claim stated that the statements and advertising campaigns were greenwashing practices that should be considered misleading acts (art. 5.1 LCD) and misleading omissions (Art. 7.1 LCD) by promoting an image of sustainability, respect for the environment and leadership in  energy transition, and of confusing consumers in their purchasing decisions.

The ruling issued by Santander Commercial Court Nº2

The judgment first considers that, as the claim focused on Repsol's use of statements on sustainability and energy transition, it was necessary to define what should be understood by sustainability. To this end, the judgment concludes that “sustainability is not a synonym for respectful or neutral with the environment”, but “is identified as the area of convergence amongst three dimensions: ecological, economic and social”, and therefore, in order to achieve this goal, it is necessary for countries, businesses and consumers to transition to a process to achieve a reduction of greenhouse emissions by 2050 and to attain decarbonisation.

Furthermore, with regard to the applicable legal framework, the judgment considers that Directive (EU) 2024/825 as regards Empowering Consumers for the Green Transition through Better Protection Against Unfair Practices and Through Better Information (“Empowering Consumers Directive”)) and the Annex I list of the same “is not the current parameter to apply ”, due to the fact it had not been implemented  into national law. As a result, this case had to be analysed in the light of the alleged practices in the claim and articles 5 and 7 of the LCD. 

About Repsol’s three advertising campaigns

The judgment considered whether the claimant IBERDOLA had legal standing to bring  the advertising claims and concluded it did not with respect to the two campaigns “Renewable hydrogen” and “Advanced biofuels” because it is a “direct competitor” of Repsol in the electricity and gas supply sector but it had not proved that it is a competitor in relation to the hydrogen or biofuels sector . In relation to the third campaign “Connecting energies/energy plans/the enlightened ones/Christmas”, the judgment did not find any environmental allegation or advertisement claim, which was the premise on which the alleged infringement was based, so it could not “be considered that there was deception or misleading omission” by Repsol.

Repsol’s corporate website claims

The judgment contains a detailed discussion of each of the claims made by Repsol regarding the statements on its Website and  examines carefully why each claim did or did not fall within the LCD. 

The ruling then makes an individualised exposition and analysis of the allegations that appear on Repsol's corporate website, differentiating five communications.

Firstly, it considers  the communications referring to ‘the rationale of Repsol’, in relation to sections of the website where the expression “Our mission: our rationale: a company committed to a sustainable world” appears (which in the claim states that ‘it is absurd and misleading for an oil company, whose predominant activity is highly polluting, to identify its mission with a sustainable world’) the judgment considers that “no environmental claims are made but rather a commitment to sustainability”. The statement has been verified by Repsol through specialised rating authorities, so that the statement is neither false nor misleading to its recipients about the nature of the company, since the Spanish consumer knows Repsol “in an almost universal way (98.4 percent), associating in 97.7 per cent of cases its activity with service stations and the sale of fuel, whose harmful nature for the environment needs no clarification. Further,  no statements are made about the characteristics of a product (for example, that a certain fuel is less harmful or more efficient) but rather about the company's position with regard to its international commitment to sustainability”.

In relation to the communications referring to “Repsol's decarbonisation objectives” of sections of the website where the expressions “We are leading the energy transition”, “Commitment to zero net emissions”, “Repsol Commitment to Zero Net Emissions 2050” or “The challenge of decarbonising the economy” are used, the ruling does not consider the statements  advertising given that “Repsol's commitment is in line with the SDGs and the targets set by states and supranational organisations themselves”. Even if these statements could be understood to be advertising, the judgment states that this information is not false and there is no evidence of misleading the consumer about the products or of Repsol  itself “given the practically unanimous perception of it being linked to service stations and fuels” so that the minimally informed and attentive average consumer “knows that they are not neutral with regard to the environment”.

Regarding the expression “We are leading the energy transition”’, the court considered that there is a lack of evidence regarding the distortion of consumer behaviour, given the consumer's knowledge of Repsol, but, in any case this is a statement that “alludes to a characteristic that is difficult to objectify and subject to evaluation (it does not falsely claim to be number one (...) or the first to assume a certain commitment or receive a specific award)”.

As for the communications referring to “Repsol's leadership in decarbonisation” in relation to sections of the website containing the expressions “we lead the energy transition”, “the fight against climate change is in our DNA” or “at the forefront of the sector in the fight against climate change” (which the claim considers are not backed up by Repsol's actual activities), the ruling reiterates what was stated in the previous paragraphs and specifies that the content of these pages cannot be “de-contextualised by analysing isolated expressions” since many of these expressions “are aspirations in the sense of alluding to a project, an ambition or a goal (..)”. Furthermore, the fact that Repsol is active and at the forefront of the energy transition seems to be normal for “companies that come from more polluting activities satisfying existing energy demands”.

As for the statements referring to “The sustainability of Repsol products” in relation to sections of the website where the expression “We supply sustainable energy products and services” appears (which the claim alleges is not the reality of Repsol's business, as these products and services are only a small fraction of its sales), the ruling does not consider, as in previous cases, that this communication is a marketing communication, nor does it consider that the assertion of supplying sustainable products is false. Further, the consumer does not suffer a risk of confusion with respect to Repsol's essential business when the website itself “describes in detail the oil business and its weight in the cleared accounts”.

Finally, in reference to the so-called “Cross-selling Editorial (Contenidos cruzados)” on Repsol's website, which, in the manner of a blog, includes articles about sustainability (that the claim states seek to increase the sale of fossil fuel), the judgment dismisses this claim insofar as the pages “contain informative content on concepts related not only to sustainability (..) without alluding to Repsol's products (with specific exceptions)."

For all these reasons, the judgment dismisses the claim in its entirety without imposing costs on the claimant due to “the debatable and dubious nature of many of the aspects dealt with”¹ . This judgment is not final and an appeal may be lodged against it.

Conclusion

In conclusion, it should be emphasised that the judgment may pave the way for future cases in which sustainability, environmental or energy transition claims made by companies in their advertising communications, including statements made on their websites, may be considered to constitute acts of deception or misleading omissions (articles 5 and 7 LCD). However, the judgment  illustrates that the Spanish court will thoroughly analyse the detail of all claims made and only those statements which cannot be substantiated will be successful. Although some modifications to the current legal framework included in the Empowering Consumers Directive were not considered in the judgment, such as the extension of the blacklist in Annex I, the requirements for inclusion in sustainability labels or the verification by an independent third party of claims of future environmental behaviour, these changes are extremely relevant in the prosecution of future lawsuits in which ‘greenwashing’ practices are considered, so the rigour with which Spanish companies comply with this Directive when using ecological or environmental claims should be a priority.

If you have any questions relating to this judgment or the implications it may have please either reach out to one of the authors or to your usual Bird and Bird LLP contact. 

[1] Pursuant to Article 394 of the Civil Procedure Act, the costs shall be borne by the plaintiff if the claim has been dismissed, unless the court finds, and reasons therefor, that the case presented serious doubts as to fact or law.