DeWind Co. (DeWind) is a vertically integrated global wind company headquartered in Germany.
One part of DeWind’s business is wind farm development, and in 2009 the company entered into an agreement with Glenmore Wind Farm, Urban Power, and Prelude by which it agreed to pay $250,000 for the exclusive right to purchase or sell the other parties’ interests in a 14 megawatt wind farm project.
DeWind did not find any buyers for the project and last month sued Glenmore, Urban, and Prelude for breach of contract.
According to the complaint (DeWind Complaint), DeWind’s inability to close a sale of the project was due to misrepresentations the defendants made about, inter alia, the project’s wind resource estimate or the defendants’ failure to complete additional development work required by the agreement.
Specifically, DeWind alleges that the defendants inflated the capacity factor/resource estimate of the wind farm:
Defendants misrepresented the Project’s wind resource estimate by representing that the project site contained a higher forecasted capacity factor than it actually did. Prior to execution of the Agreement, Defendants represented that the project site contained a net capacity factor of 31.8% in a financial deal pro forma dated May 5, 2009. However, the wind resource estimate report provided by the Defendants after execution of the Agreement stated that the project site actually had a net capacity factor of 25.8%.
This difference in net capacity factor made the project non-economical, DeWind alleges, and turned out to be a “decisive cause” of its inability to sell the project.
The complaint says the misrepresentation is a violation of the agreement, and DeWind is asking the court to award a refund of the $250,000 fee.
Although this is not a case involving allegations that would typically be called greenwashing, I believe it is properly viewed as a greenwashing case because it involves false or misleading statements about the environmental benefits of a produce or service.
The plaintiff just happens to be a large commercial consumer instead of an individual consumer, and the service is wind energy output instead of products or services sold to individual consumers.
Most discussions of greenwashing are unduly restricted to cases in which an individual consumer, a class of consumers, or a consumer watchdog such as the FTC challenges a company making false or misleading green claims about its products or services.
To put greenwashing in its proper context I think we should consider a wider range of cases, some of which are not immediately recognizable as instances of greenwashing.
To do so requires looking beyond individual consumers to commercial consumers and beyond green marketers to companies that make false or misleading claims about clean tech products and services.
From this broader vantage point, and keeping in mind the definition of greenwashing – making false or misleading claims about purportedly environmentally friendly products, services, or practices – we are able to recognize, observe and understand greenwashing in its proper context.
If DeWind’s allegations of inflating net capacity factor for a wind farm are true, those misrepresentations would be greenwashing, and anti-greenwashing legal actions such as this case are at least equally, if not more, important than the false or misleading claims directed at individual consumers.