There are two battles in the race for organisations to reach their sustainability goals. The first is to actually hit targets that bring down carbon emissions by the end of the decade. The second is to tell all their stakeholders about their plans to reach net zero. One of these is more challenging to achieve than the other and far too often it is the second goal that many companies find easier to do.
Take Budweiser as an example. In some of its advertising, the company told customers that all of its beers, cans and kegs had been produced from 100% renewable energy sources, which is a pretty impressive feat given the amount of energy and water required in brewing. A complaint was made about this to the UK Advertising Standards Authority, which resulted in Budweiser UK having to add an asterisk beside the claims, pointing out that this was done through the purchase of equivalent offsets, rather than its operations being directly powered by renewable energy.
Corporate power purchasing agreements are a standard way to set off carbon emissions, but it is easy to see how this could confuse the public who may not necessarily understand the difference.
An information gap allows firms to maximise their claims without having to do the hard work
Be clear
Private direct energy connections from wind or solar farms directly to an end user are rare, and usually insufficient to totally power anything of scale. While a company can sign a purchasing agreement to buy the output from a dedicated wind farm, it should still make clear what it has done.
That information gap allows firms looking to tout their sustainability credentials to engage in greenwashing, maximising their claims without having to do the hard work.
If we want to change behaviour, we need to believe we’re all in it together
A study by Ireland’s Trinity College Dublin and the Economic & Social Research Institute (ESRI) thinktank found that half of the 2,000 people who took part failed to spot greenwashing attempts. Researchers found many of the ads shown to participants were deliberately vague, such as providing no verifiable proof of claims or highlighting one attribute of a product without pointing out that it was insignificant in the context of its overall environmental impact.
Taking advantage
This matters for a number of reasons. It is unfair on those who are genuinely making the hard choices and investment to transition their businesses towards sustainability and reach net-zero targets. And it allows those, perhaps in sectors where emissions reduction is much more difficult, to take advantage of the lack of clear definitions to pass off their efforts as green-friendly.
Apart from denying consumers the choice to support environmentally sustainable brands, it also allows laggards to hold out against meeting their carbon emission targets, which are already under pressure as we close in on deadlines. The downside to this is that it promotes cynicism on multiple levels. If we want to change behaviour, we need to believe we’re all in it together to halt the damage to the climate. If we think some are gaming the system, then why bother to do anything at all?
A universal set of metrics that can be measured and tracked will make greenwashing impossible
Greenwashing matters more now than ever before. We are at a point where there is a mounting pushback about environmental, social and governance generally, and a sense that no matter what efforts individuals or companies make, the climate crisis is falling down the agenda and we’re losing the battle anyway.
The Trinity College/ESRI report recommended that educating consumers on the tell-tale signs to spot spurious strategies and PR tactics would create a more level playing field so that truly environmentally friendly firms benefit. That’s placing an awful lot on individuals who shouldn’t be put in that position.
A better way to get where we need to be is to ensure that there is a universal set of metrics that can be more accurately measured and tracked, which will make greenwashing impossible. Those that adhere to them will be rewarded and those that don’t will eventually be shamed into doing so for competitive reasons.
More information
Visit ACCA’s sustainability hub for guidance and CPD on meeting reporting challenges
Read this AB article on climate disclosures
