Everywhere you look at the moment you will see announcements and declarations by companies – large, small, and everywhere in between – that they intend to become carbon neutral. They are committing to net-zero emissions by some future date.
Their promise is to take whatever action so greenhouse gas emissions from their activities is as close to zero as possible. That will happen by 2030, or 2035, or 2025 – whatever timeline the organisation has nominated.
This is where things get a little murky. There are no standards, or regulations around this stuff. An organisation can, quite legally, say whatever it wants about reducing its carbon emissions. And unfortunately, some are doing just that – saying anything. It has been christened ‘greenwashing’, and there’s a lot of it.
Some plans simply don’t include enough details to be meaningful. Some aren’t even plans, just a declaration. Some use the language of climate change action but say nothing meaningful. Some may simply underestimate the enormity of the task ahead of them, and have committed to something they can’t deliver, or find they don’t have the skills or resources to follow through.
Some, unfortunately, are attempting to bask in the warm glow of carbon neutrality while not actually doing anything.
Of course, not all companies and organisations have taken the greenwashing option. But ordinary citizens, investors, financiers, and customers all have their concerns. Who’s doing the right thing, and who is greenwashing? So, the UN appointed an expert panel to find out what was going on and make some recommendations on how to bring greenwashing to an end.
Here is what they found:
- Over 80 per cent of global GDP is covered by net zero pledges.
- One-third of the world’s largest publicly-traded businesses have made a commitment to net-zero operations. (Time frames vary).
- Only half of those companies have transparently shown how they will achieve that target.
- The rest have simply announced that they have a net zero target, or that they intend to set one.
In the words of UN Secretary-General António Guterres, the criteria for net-zero commitments can have loopholes wide enough to “drive a diesel truck through – we must have zero tolerance for net-zero greenwashing.”
The report’s recommendations
This report is just the first to be delivered by the UN Expert Group. There are 10 detailed recommendations, but the list below, in the Secretary General’s own words, is a good summary.
1. Promises cannot be a ‘toxic cover-up’
“Using bogus ‘net-zero’ pledges to cover up massive fossil fuel expansion is reprehensible. It is rank deception. This toxic cover-up could push our world over the climate cliff. The sham must end.”
2. Plans must be detailed and concrete
“Management must be accountable for delivering on these pledges. This means publicly advocating for decisive climate action and disclosing all lobbying activity.”
3. The promises must be accountable and transparent
“We must work together to fill gaps from the lack of universally recognised credible third-party authorities – and we must strengthen mechanisms positioned to conduct this verification and accountability process”.
4. Voluntary initiatives need to become a new normal
“I urge all government leaders to provide non-State entities with a level playing field to transition to a just, net-zero future. Solving the climate crisis requires strong political leadership.”
What does the report mean for us?
What does all that mean for us as business owners and managers? I would simply repeat the four points above. The ‘insincerity (or BS) detectors’ of our employees, customers, suppliers, financiers and regulators are becoming more and more sensitive to greenwashing. ASIC is also starting to turn its attention in this direction, so the time for greenwashing is well and truly over. Real action is required.
This post first appeared on https://insidesmallbusiness.com.au on January 30, 2023.