Being Intentional: News & Insights for Sustainability Leaders
The latest News & Insights from the Motive Team
Motive builds tools to help sustainability and ESG leaders be successful. In this edition of Motive’s bi-weekly email, we discuss the trends in Greenwashing and how leaders can avoid common mistakes.
[A Quick Note: We’ve been asking for feedback and you’ve responded! All the content you have come to enjoy from Being Intentional is still available, but now some sections are being moved out of the newsletter and posted directly to our blog (Here). Our aim is to keep the newsletter to a more manageable length while also making it easier for everyone to get to the content that interests them the most as fast as possible. This is the first issue of the new layout we are trying, so please let us know what you think.]
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The Data and the Story
Greenwashing--it’s so hot right now.
As the issuers of reports, plans, and communications, the onus is on corporate sustainability teams to 1) not greenwash, and 2) ensure their communications could not reasonably be misinterpreted as greenwashing.
Looking back over the last 12-months across news media and Twitter, we can see that mentions of greenwashing have been following a steadily increasing trendline. Across this timeframe, there is an average of 2,460 posts per day--interest (or should we say concern?) in greenwashing is real.
But this is where things get really interesting. If we disaggregate the sources so we can see mentions in news media distinct from mentions on Twitter, it becomes apparent that the increasing trend is driven by social media.
Greenwashing is a topic of concern in the news media…just not as much of a concern as it is across social media. And this makes sense when you consider that news media are approaching the topic from a different operational context than are the vast majority of individuals posting on Twitter.
In a fundamental sense, greenwashing is when a company benefits from the illusion of change while actively not engaging in change, or even while preventing change. It's about benefiting from intentional deceit. This is largely the definition the established news media operate with. So to run an article accusing any company of greenwashing requires substantial research and analysis. They need to be able to adequately contrast anticipated outcomes to actual outcomes and establish intent in the event of any shortfall. It’s not easy and certainly not fast.
People on social media, on the other hand, are not constrained by this definition. From our observations, accusations of greenwashing fly not only when companies benefit from intentional deceit but also when a company pledges--or delivers--outcomes that do not meet the individual’s expectations. And it is this operationalization of the ‘greenwashing’ term which is growing in prominence.
You commit to Net-Zero by 2050 but I want full decarbonization by 2030--Greenwashing! You are actively implementing DEI policies but I want quotas--Greenwashing! Your view of sustainability is heavy on the social but mine is heavy on the environment--Greenwashing!
As the world becomes more concerned with sustainability so too does it become more concerned with false commitments to sustainability. The challenge of course is in everyone’s ability to differentiate the meaningful from the false commitments.
As an individual, before you accuse a company of greenwashing, ask yourself: “Has this company failed to deliver on its commitments to sustainability or has it failed to live up to what I thought its commitments should be?”
As a leader of a corporate sustainability team, ask yourself:
Are our sustainability plans integrated with our business activities?
Do our sustainability plans commit to actual and meaningful change?
Is this change equal to or greater than the illusion of change conveyed by the plans?
Are the anticipated benefits of the sustainability plans likely to accrue due to the implementation of the plans rather than simply the communication of the plans?
In the Real World
The last two weeks have really brought attention to greenwashing.
The NewClimate Institute released the Corporate Climate Monitor 2022 (LINK) assessing the climate strategies of 25 major global companies (which, not incidentally, account for 5% of global annual GHG emissions). The report does an excellent job in suggesting an optimal trajectory to achieve the stated Net-Zero objectives and then finds that the 25 corporate climate plans are significantly lacking.
What has the social media response been to the report so far? Excellent!...as the report is being embraced as ‘unveiling the shocking cases of greenwashing by the world’s largest companies’. Unfortunately, the report is not originally about greenwashing, but let’s not let that get in the way of going viral. The NewClimate Institute report is a great example of how corporate sustainability plans are engaged by a broader community of stakeholders and serves as a flagship example highlighting the five principal tensions in sustainability communication (which we present in our latest blog (LINK).
A new study published on Wednesday in the journal PLOS One, and carried here and here finds that the Oil Majors, including ExxonMobil, BP, Chevron, and Shell have been increasingly using decarbonization terms in their annual reports even though their purported actions amount to mostly pledges and not actual actions. There is lots of talk of transitioning to clean energy business models…but no actual transitioning.
What’s most interesting about this study is that it looks at data from 2009 to 2020, making it one of the more in-depth analyses to date. BP is likely the most active of the group, with mentions of climate change in annual reports climbing from 22 in 2009 to 326 in 2020, yet all the while generating only 2,000 MW of renewable energy (or the equivalent of two gas-fired power plants). Accusations of greenwashing may be thrown around quite freely…and sometimes they fit.
Greenwashing doesn’t just apply to companies. News broke earlier this week (LINK) that Morningstar, the leading data provider for mutual fund and ETF research, and now the owner of what used to be the Sustainalytics ESG data provider, removed a full 1,200 funds from its European ‘sustainable universe’ of assets. Following the EU’s rules on sustainability disclosures, Morningstar analysts reviewed all funds carrying a ‘sustainable’ designation and found 1,200 funds to be employing ambiguous language and questionable credentials. And just like that, $1.4 trillion in assets once considered Green moved to brown. There is a cost to greenwashing (one we discussed in our last Newsletter looking into the EU Taxonomy, which is clearly already having an impact!)