Case Name: Instituto Brasileiro de Defesa do Consumidor (IDEC) vs. Localiza Rent a Car S/A (Information Provision and Greenwashing)

Summary

This is a legal challenge filed by the Brazilian Institute for Consumer Protection (IDEC) against the car rental company, Localiza Rent a Car S/A. This action is part of a set of two challenges filed by IDEC alleging greenwashing practices and problems in the use of carbon credits from the voluntary market. In this case, Localiza is questioned for offering rental services with offsetting of greenhouse gas (GHG) emissions through the "Carbon Neutralization" and "Commitment to Climate" programs. However, IDEC believes that this initiative may constitute greenwashing due to the imprecision regarding the 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 there are indications of greenwashing due to gaps in the information collected through the defendant's website. Furthermore, the offer would not comply with consumer law, as it violates objective good faith (Article 4, III, CDC), as well as the consumer's basic right to freedom of choice (Article 6, II, CDC) and to adequate and clear information (Article 6, III, CDC). The payment of an additional amount in a car rental contract for offsetting GHG emissions requires justification to be considered an offer that fulfills consumer rights; however, the consumer is misled due to a lack of adequate information, and thus believes that the defendant will provide a service that generates less environmental impact. Greenwashing is characterized as unfair practices that downplay the risks and threats to socio-environmental rights; therefore, it is believed that the defendant uses this tactic because GHG emission offset programs have a positive impact on its image. Firstly, because the service provided would be guided by ESG standards, generating a favorable image for the company. Furthermore, it affects a segment of consumers who base their consumption on socio-environmental criteria. It is stated that the purpose of filing the Judicial Interpellation is to allow the company Localiza to provide detailed explanations of its GHG emission compensation practices, as well as to enable the Interpellated party to correct any inconsistencies. The interpellator requests that documents be provided proving the veracity of the benefits of the programs offered in the car rental service, as well as that the questions presented regarding the programs be answered.

In response to the Judicial Interpellation, Localiza Rent a Car S/A presented information about the operation of its sustainability programs, such as the Neutraliza Program, and about how many tons of CO2 it has already offset. It stated that the information provided to consumers is clear, including the factors used to calculate emissions and the amount charged, and that consumers can freely and knowingly contract the programs. The contracted amounts are 100% converted into the purchase of carbon credits, which can be accessed in the company's sustainability report, and after offsetting GHG emissions, consumers receive a certificate informing them of their neutralized emissions. It also presented other information about the REDD+ Jari Amapá and Manoa Projects mentioned in the initial petition, indicating that they follow international standards and certifications, and are audited.

A ruling was issued to close the case, as the formal notification was deemed to be in order. The case was definitively archived.

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Main norms mobilized

• Article 170 of the Federal Constitution (CRFB/88)
• Article 225 of the Federal Constitution (CRFB/88)
• Article 5th of the Federal Constitution (CRFB/88)
• Consumer Protection Code - CDC (Federal Law 8.078/1990)

Case timeline

Case documents