Sixteen anti-ESG state attorneys general recently signed a letter to big tech companies Meta, Amazon, Microsoft, and Google inquiring about their renewable energy practices. These AGs take issue with company claims of using 100% renewable energy in their operations because these claims are based on the use of unbundled Renewable Energy Certificates (RECs). Using RECs, like carbon offsetting, is a controversial practice that involves buying rights to sustainable energy that a company did not generate or use firsthand. The AGs letter argues that this practice is misleading because RECs does not actually increase the amount of clean energy produced and contributed to the nation’s power grid:
“Companies cannot argue that their claims are justified based on the generation of additional power by the unbundled RECs. Purchasing unbundled RECs ‘does not increase the amount of renewable generation,’ as those RECs ‘regularly come from projects developed years before procurement,’ and ‘contribute zero to the development of new renewable energy projects.’ Unbundled REC purchases tend to be from the cheapest sources, which are already-existing power plants, such as a trash incinerator. If RECs like those had not been purchased, the amount of renewable energy added to the grid and used by the tech companies would have been the same.”
This is another example of what may seem to be a counterintuitive practice from anti-ESG that we’ve written about before. Anti-ESG forces are opening greenwashing investigations that are very similar to what ESG proponents might bring. However, while the means are the same, the ends are quite different. The goal of pro-ESG greenwashing enforcement is to improve ESG practices and bring claims in line with reality. On the other hand, anti-ESG is attempting to raise the level of risk associated with ESG in the hopes that companies will abandon their practices rather than face legal scrutiny.
Members can learn more about trends in greenwashing here.
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