Greenwashing is Dead.
“I come too early,” he then said, “I am not yet at the right time. This prodigious event is still on its way, and is traveling, — it has not yet reached men’s ears… This deed is as yet further from them than the furthest star, — and yet they have done it!” — Nietzsche
As corporate sustainability initiatives transition from targeted marketing campaigns to new business opportunities and a necessary form of risk management Greenwashing will become irrelevant. While many organizations take their first steps towards sustainability environmental advocates are taking to social media to rebut company actions as greenwashing. In order to prove the ROI of sustainability investments it is important for companies to demonstrate the value of their spending in the near term. What some perceive as green washing is actually a near term value proposition while long term operational transformation takes place.
To understand why greenwashing is irrelevant we must understand why it exists. Greenwashing exists for two main reasons. The first reason is that a company’s core business model or a necessary component of its supply chain is inherently damaging to the ecosystem, the second is that demand for a company’s product is greater than perceived financial risk posed by climate change. Similarly, a company can fail to account for the impacts of climate change and the damage it will cause to its business model. Both the failure to measure climate risks and demand for unsustainable products have solutions (although one seems to be easier to tackle).
In order to accurately measure climate risk, thousands of companies sell analytics tools to monitor emissions and other environmentally damaging impacts. Each tool has its own system of measurement, making it difficult to coherently benchmark one company’s performance against another. This is most obvious when analyzing ESG funds. Estimated investment into ESG compliant companies ranges between 1–38 trillion USD (these numbers are not close).
In September the CDP, CDSB, GRI, IIRC and SASB established a working group to create a shared reporting system with goals laid out by the TCFD in mind. These organizations will make it easier for corporations to measure and communicate sustainability practices. Additionally, government bodies are legitimizing sustainability standards. For example, the EU taxonomy is a step towards creating a shared language for climate risk while the SEC is moving towards a mandate on climate disclosure by calling for public comment on this topic.
Access to tools that measure the environmental impact of companies is not limited to government and financial institutions. Tools like Unspendr, Finch, Doconomy and Chooose empower consumers to invest in and purchase products that meet sustainability expectations. The trend of increasing access to information further eliminates the ability of companies to greenwash.
The alignment of long-standing reporting frameworks and government bodies and consumer solutions will make it increasingly difficult for companies to greenwash. Moreover, companies that fail to account for the impacts of climate change or do not perceive an immediate threat will either be forced to pivot or face the reality of an irrelevant product. Companies that embrace this trend will thrive and companies that greenwash will become irrelevant.
The solution is to provide quick wins to companies looking to implement a sustainability strategy while also iterating the need for operational changes. Initiatives like the Amazon Climate Pledge Arena or Google’s commitment to 24/7 carbon free energy by 2030 prove we are in the midst of a tipping point on climate action. Instead of wasting energy criticizing approaches to sustainability, it makes more sense to meet companies with tools that offer a short term ROI and long term path to decarbonization.
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About the Author
A native Californian and yogi, Brittany is making it easy for everyone to live an active and eco-conscious lifestyle by linking sustainable finance to health and fitness. In addition to being the co-founder and CEO of Sādu, she is also a Founding Board Member of the donation based running app, Active Giving. Previously, she established Plug and Play’s European Sustainability program, supporting venture capital funds and innovation departments in their search for investment opportunities.
Brittany has been active in the cleantech startup ecosystem since 2015 where she began her work at a Smart City consultancy in New York. Brittany received a Master’s in Global Energy Policy from New York University and Bachelor’s in International Political Economy, all of which formed the foundation of her career and a fascination with the interlinking of economics and environmental sustainability.
