Greenwashing; An Unnecessary Evil

The CC perspective: Greenwashing; an unnecessary evil

As exiting head of the Environment Agency Head lashes out against greenwashing, Content Coms Environment Editor Giles Crosse examines why this troublesome practice still holds back corporate sustainability.

Greenwashing. It’s the unjust and irreconcilable problem whereby global corporates seek to mislead on environmental practice and accreditation; prioritising short term profit over long term good.

In a piece for The Guardian, Environment Agency Chief Emma Howard Boyd warns against the practice. She argues widespread greenwashing by businesses is compromising efforts to prepare for climate impacts such as floods and heatwaves.

She also warns businesses are embedding liability and storing up risk for their investors by giving the false impression they are addressing the climate crisis.

There is some heavy clout within The Guardian analysis. Lord Deben, chair of the climate change committee and a former Conservative environment secretary, said the government had set strong targets on cutting emissions but policy to achieve them was lacking. “The government has willed the ends, but not the means,” he said.

Ms Howard Boyd, who leaves the Environment Agency in September, is interim chair of the Green Finance Institute. She believes nearly £650bn of public and private infrastructure investment planned by 2030 is at considerable risk unless increasingly severe climate impacts are considered in planning and delivery.

“As with the government’s ambition for Net Zero by 2050, delivering on climate resilience and nature recovery requires robust, consistent and trusted data,” she argues.

“If we fail to identify and address greenwashing, we allow ourselves false confidence that we are already addressing the causes and treating the symptoms of the climate crisis.”

So we know greenwashing’s impacts are huge. What can we do to alleviate them?

What’s the solution to it all?

After some 25 years studying this issue, your correspondent can point straight to the problem. It’s outlined by numerous commentators I’ve spoken with down the years. Consider the following scenario.

What’s to stop a UK corporate from seeking out a carbon disclosure and reporting framework (of which there are a seemingly infinite variety) that presents its environmental performance in the best light?

What’s to stop said corporate from then using this framework in its ESG and CSR papers to investors, thereby sneakily and mistruthfully leveraging green bonds or finance?

The answer, tragically, is nothing. Herein lies the fundamental issue that enables greenwashing. There is no level playing field. There is no UK-wide nor global accord that defines what must be included in reporting frameworks nor which ones are best to use.

Let’s be clear; great frameworks and reporting concepts do exist, The Global Reporting Initiative and Science Based Targets among them.

But there is no law to control what they ask for. This blog on the subject details eight frameworks businesses can use and even tacitly hints firms can (should?) pick the one that suits them best.

‘Choosing an ESG framework is only half the problem,’ it writes. Nope – this ‘choice’ is the entirety of the challenge that enables global greenwash. It has to be solved.

Here’s another carbon blog comment that evidences the issue: ‘There is no single way to report and the best solution will differ from one business to the next, depending on the drivers, pressures, audiences and data availability of each organisation.’ To me, that’s all another word for potential greenwash.

Sort it out

Numerous agencies tasked with leveraging green money right, indeed world-leading and world-scale agencies, have told me of their immense frustration at today’s scenario. It makes no sense.

Billions, indeed trillions in global cash are flowing to the wrong businesses daily. Net Zero, climate adaptation and corporate sustainability are alive, but they risk fundamentally missing the goalposts.

Be under no illusions as to scale and importance. Climate Bonds Initiative (CBI) says the first annual USD trillion in green issuance could arrive as early as this year.

This is according to the latest flagship Annual Sustainable Debt Global State of the Market Report, drawing on the latest data from Climate Bonds’ Market Intelligence.

The report is the most comprehensive of its kind and shows that sustainably-themed debt rose to almost USD1.1tn in 2021, marking a 57 per cent increase upon 2020 volumes.

In addition, annual green bond issuance also broke through the half-trillion mark for the first time, ending 2021 at USD522.7bn, a 75 per cent increase on prior year volumes. The next milestone for green finance is set for an annual $5 trillion by 2025.

None of this leveraged cash can, as things stand, assuredly be going to firms that aren’t in some way engaging in greenwashing.

The next steps

In recent news reported by The BBC, environmental groups are suing Dutch airline KLM, alleging that adverts promoting the company’s sustainability initiative are misleading.

The groups say it’s the first lawsuit to challenge airline industry greenwashing. They argue that KLM adverts and their carbon-offsetting scheme create the false impression that its flights won’t make climate change worse.

But KLM says the company’s statements are based on solid arguments, and that it believes its adverts comply with the ‘applicable’ legislation and regulations. Sound familiar? An unlevel playing field perhaps?

Joana Setzer, assistant professor of climate law at the London School of Economics, told The BBC companies are in a difficult position.

“They’re forced to show they’re doing something and announce commitments, but it’s not only insufficient but dangerous for them to do so, as they might find themselves sued for misleading information,” Prof Setzer says.

“With greenwashing, it’s a relatively easy and cheap case to bring, but it’s also a case where you can address the advertising as well as the communications around Net Zero commitments.”

To my mind, her approach is way too light. She’s letting the culprits off. It all seems to make a conclusive case for a new set of standardised, global reporting needs. Let’s stop the rot for good. Which government is going to push first?

If your organisation – whether it’s large or small – is struggling with greenwash, or concerned about authentic, honest and transparent communications as part of your ESG / sustainability journey – we’re here to help. Follow the link to download a copy of our really useful Content Coms Anti-Greenwash Playbook.

The Anti-Greenwash Playbook by Content Coms

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