Curb your enthusiasm: why greenwashing is giving way to greywashing
Climate regulations are causing concern in the boardroom. Previous goals may go unmet, leading some companies to revise their targets and greywash performance. Without more proactive corporate communication, this will erode trust.
Less is more
The 2020s have witnessed a surge in climate legislation, marking the beginning of a new era for sustainability accounting, reporting, and marketing. While this increased regulation aims to ensure the accuracy and validation of climate goals, it has also stirred unease in the boardroom. The lofty public statements and targets of prior years will likely be unfulfilled. Some companies are revising their goals to mitigate reputational risks. Greenwashing is giving way to greywashing.
The ostrich strategy
The year 2023 was reported as the hottest year on record, with every month since June 2023 experiencing record-high temperatures1. Despite efforts to meet global climate policies and targets, temperatures are anticipated to increase by more than 1.5 degrees, potentially reaching a catastrophic 2.9 degrees based on studies2.
2. https://edition.cnn.com/2023/11/30/world/ cop28-climate-backsliding/index.html
There is an urgent need to take action to protect our future from climate-related disasters. Large businesses, which are major contributors to the issue, are expected to play a significant role in finding solutions. What does this say about organisations that backtrack on climate goals?
Try harder
Some argue that the concept of sustainability reflects authenticity and honesty. The term “sustainability journey” is used to show that it’s not always a straightforward process. Therefore, if Unilever admits its climate goals were overly ambitious, we should commend it for being honest. We should recognise that climate goals are complex and data has evolved rapidly, leaving businesses scrambling to catch up. We should show empathy for these businesses now under pressure from various stakeholders who are suddenly interested in their climate goals. Shouldn’t we?
Kicking the can
Earlier this year, Shell updated its carbon targets. While its net-zero by 2050 goal remains unchanged, it has adjusted its shorter-term targets. Previously, Shell had an interim target to reduce “net carbon intensity by 45% by 2035,” but this target has been removed. Short-term targets are crucial for demonstrating a sincere commitment to reaching net zero. That’s why they are now mandatory under the Science-Based Targets Initiative. Shell seemingly has an additional 15 years until 2050 to show significant progress towards decarbonisation. Procrastination only makes failure more likely.
The finger and the moon
How can stakeholders trust a business if its climate targets are not resilient? As we anticipate future extreme weather patterns impacting infrastructure and supply chains, companies must demonstrate their ability to weather the storm. When climate goals are not met, businesses often blame a lack of legislation. However, if businesses rely on legislation to meet goals, it raises the question of whether their motivation is to solve climate change or avoid non-compliance.
Integrated narratives for integrated business models
In a world where beliefs, views, and facts are increasingly challenged, organisations must authentically communicate who they are and meet complex expectations. To demonstrate a sincere commitment to climate action, businesses must integrate it into their core operations rather than treat it as an add-on. As more stakeholders, including investors, become vocal about climate commitments, it’s vital to demonstrate how a business is prepared for the impacts of the climate crisis.
A materiality assessment (or double materiality) will help determine priority areas and goals most relevant to the business model – the more tailored the approach, the more likely it is to stick.
Scenario analysis (aligned with TCFD) should highlight the resilience of the business in the face of a 1.5°C world. Finally, robust data collection and analysis will showcase a commitment to climate goals – and allow precise planning to meet them.
The time for integrated narratives is now, if not now, when?
Get in touch:
If you’d like to discuss this, or any other subject, please get in touch with Katy Fuller, Director of Sustainability, at katy@gather.london
We’d love to know what you think.