Net-zero commitments are common, but just because a company advertises itself as net-zero doesn’t mean it is. Greenwashing is rampant and companies commit to net-zero while doing very little to decarbonize. One emerging form of greenwashing is policy greenwashing – where a company’s efforts to influence public policy conflict with its public position on net zero. Recent research from InfluenceMap indicates the practice is surprisinlgy rampant among major companies. Researchers examined public statements of 300 Fortune 2000 firms and found that in 58% of cases, companies were at risk of greenwashing due to their public policy engagement. InfluenceMap states that it:
“Considers a company to be at risk of ‘net zero greenwash’ due to its policy engagement if it has announced a net zero or similar target but is not sufficiently supportive of policy to deliver the Paris Agreement according to InfluenceMap’s world-leading LobbyMap platform. The assessment of policy engagement includes both the company’s own engagement and that of its industry associations.”
A significant number of companies sell themselves to consumers as being climate-friendly, while also attempting to lobby governments to not take climate action. This form of greenwashing raises reputational risk concerns though the legal risks of such action are currently low, at least in the United States.
Part of the problem is the ease of claiming net-zero alignment. Net-zero commitments are broad and encompass both actionable decarbonization plans and vague aspirational statements. The research notes that while 87% of companies analyzed made net-zero commitments, only 8% of those were aligned with the Science Based Targets Initiative. While the double speak in itself might not be legally actionable, advertising to investors and customers based on net zero commitments that may never come to fruition can be. As we move into a more mature climate space, companies may find that regulators and the public expect more follow-through on climate action.
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