It's not as if greenwashing research reporting is new, but suddenly it seems everyone is way more interested in facts. Greenwash reporting is emerging both for corporate virtue signalling and more broadly for citizen watch. Consulting firms are wielding ESG, Carbon and specific industry reports. It seems the climate really has changed. (Had to be said.)
The rise of data science and increasing climate calamities has made the power of facts a weapon of choice for exposing fault lines. Consulting groups have always been excellent researchers and good reporting is one of the key ways they promote themselves. So, alliances between consultants and do-gooders is a marriage made in heaven for the earth.
THE THING ABOUT DATA IS THAT IT IS MADE UP OF INDISPUTABLE FACTS. THE TRICK IS TO BE IN THE RIGHT CLIMATE TO GET ATTENTION AND NOT BE SIDE-LINED BY YOUR TARGET'S BIGGER MARKETING POWER. SEEMS THAT TIME HAS ARRIVED.
Data that exposes greenwashing as a set of facts allows citizens to make up their own mind about what it means to them. And in the climate impact arena, different things matter to different people. It's also way easier to take someone to court when you have concrete evidence.
There are many ways companies greenwash, here are a few of the more common:
In the last couple of months alone, here are 3 separate industry reports - on energy, fashion and investment funds, that hit our doorsteps that illustrate the point - and which make extremely informative reading.
In an extensive research report released in May 2021, Greenpeace outed AGL as Australia’s biggest polluter, finding that coal made up 85 per cent of AGL's output, while renewables accounted for 10 per cent. Despite their persistent green credentials marketing, in 2019-2020, AGL was responsible for more than 8 percent of Australia’s total emissions. AGL was responsible for over 42 million tonnes of GHG emissions last year - more than twice the amount of the next biggest emitter, and with no plans to slow down in the coming years. Continuing on their current trajectory will result in 746 million tonnes of more emissions, which is the same as produced by about 160 million cars a year, according to the Greenpeace report.
The Greenpeace report relates not only to pollution, but to the inevitable demise of coal assets as renewable energy is pushing coal to redundancy. If, by 2025 an extra 70,000 gigawatt hours worth of renewables are expected to be connected to the grid, and coal-fired plants close, what of the workers?
THE IMPORTANCE OF THIS KIND OF REPORTING ISN'T JUST ABOUT POLLUTION. IT ALSO SPEAKS TO THE RESPONSIBILITY FOR COMPANIES TO TRANSITION WORKERS WHEN PLANTS CLOSE.
COAL MINE WORKERS AND GREENIES NOW HAVE A SHARED CONCERN ABOUT BIG POLLUTERS AND THE FUTURE, JUST FOR DIFFERENT REASONS.
The Changing Markets Foundation June 2021 report investigated the behaviour of some of the biggest fashion brands and retailers and their use of synthetic fibres and transparency about doing so. The fast fashion industry's business model relies heavily on the use of cheap synthetic fibres and since the early 2000s, fashion production has doubled – as has the use of polyester, which is now found in over half of all textiles. Synthetic fibres represent over two-thirds (69%) of all materials used in textiles and is expected to reach nearly three-quarters by 2030. Eco Business summed it up - and pretty much summed up the status quo.
ALMOST 60 PER CENT OF SUSTAINABILITY CLAIMS BY FASHION GIANTS ARE GREENWASH. WIDESPREAD ‘DELAY-DISTRACT-DERAIL’ GREENWASHING TACTICS BY MEGA FASHION BRANDS DETRACT FROM INDUSTRY’S CLAIMS ABOUT ITS SUSTAINABLE PRACTICES.
The problems in the fast fashion industry are many and its survival has a lot to do with its complexity and the way that complexity plays to greenwashing tactics.
Changing Markets called for the European Commission (EC) to implement mandatory measures to aid in dismantling the inherently unsustainable fast-fashion model, including recommendations for a tax on virgin plastic, setting up Extended Producer Responsibility (EPR) schemes for different types of textiles, and preventing companies from making unsubstantiated green claims. Both the EC and its US counterpart, the Federal Trade Commission (FTC), have taken steps in these directions.
Given both the quantums and breadth of their touch points, one of the most important, yet difficult to achieve ratings we need is an ESG scorecard for funds managers. There are many local and global systems at various stages of development, but right now there is still no global rating system.
UNPRI are among the best at a manager level and they apply filters to lists of potential investments to rule companies in or out of contention for investment, based on an investor’s preferences, values or ethics.
Global umbrella body for securities regulators, International Organization of Securities Commissions (IOSCO) has also proposed a framework to improve the consistency, comparability, and reliability of sustainability reporting for investors. In a 28 June report on issuers’ sustainability-related disclosures. Eco Business reports on IOSCO:
FUND HOUSES HAVE INCREASINGLY FOUND THEMSELVES UNDER THE SPOTLIGHT FOR OVERSTATING THEIR GREEN CREDENTIALS.
TO TACKLE THIS, THE BODY IS CRAFTING RECOMMENDATIONS TO ADDRESS THE ISSUES ARISING FROM THE PROLIFERATION OF AND “SYSTEMIC OVER-RELIANCE” ON “THIRD PARTY” DATA AND ESG RATINGS PROVIDERS THAT HAVE STEPPED IN TO PROVIDE THE INFORMATION TO INVESTORS, INCLUDING ASSET MANAGERS.
With confusion over the many different ESG ratings, it's easy to see how reliability and greenwashing are called into question.
The reality of our world is that all industries are complex, each with their own challenges, but research reporting gives us a vehicle to tackle every part of each industry machine and it's impacts. Coupled with a mood among citizens for more transparency, this kind of work in changing policy and facilitating 'places to start' has arrived at exactly the right time.
Images: Unsplash / Greenpeace / Changing Markets Foundation / UNPRI