"Corporate greenwashing is a serious problem, and a growing one," Gilles Dufrasne, co-author of the 2023 Corporate Climate Responsiblity Monitor report and policy lead for Carbon Market Watch, told AFP in an interview.
"Spurious claims give the illusion that corporations are taking serious action to tackle the climate crisis when in fact they are sweeping it under the carpet."
The interview has been lightly edited for concision and clarity.
- What sort of claims are companies making? -
"Carbon neutral", "good for nature", "net zero" -- the average consumer just doesn't understand what these claims mean.
Most people think "carbon neutrality" means that emissions have been reduced when actually they have only been compensated.
This is misleading, because often it's going to cover only a portion of the emissions from a certain product, or it's going to rely on the purchase of emission reductions schemes that just don't deliver the climate impacts that they're supposed to.
A project, for example, to protect a forest may have a massively exaggerating impact, and is vulnerable to forest destruction.
- What's a better practice for firms? -
For a company to say, "I've contributed to supporting this project" is much less risky in terms of misleading consumers.
Some companies are genuinely trying to do the right thing but are being badly advised by all the consultants that they are paying, who sometimes have conflicts of interest because they also sell carbon credits.
I have a lot less patience for big multinationals because they have the resources to do their homework. It is not a good justification for Shell, Nestle, Volkswagen and other major companies to say they didn't understand what's behind these carbon credits.
You also have a need for more rules around how you reconcile the need to reduce a company's own emissions, versus the need to finance projects that are outside of their activities.
If you're Microsoft, you need to reduce your own emissions but you also need to provide financing to reduce deforestation because you are a company with a lot of financial resources and there's no way that we can reach the level of investment that is needed if we just bank on public finances.
- What should governments do? -
Ultimately it is unrealistic to expect companies to be moral actors in the absence of external drivers. Regulations are needed requiring companies to reduce their emissions, and regulating what they can -- and cannot -- say to consumers.
The short term action that's needed is to ban carbon neutrality claims. If the company wants to buy junk carbon credits that don't represent anything, they're free to do so, but they're not free to make false and misleading statements.
Of course, there is a risk that if we ban a certain set of words, then marketing departments from companies will come up with another set of words that might be equally misleading.
- Is this an issue everywhere? -
The problem is different in different jurisdictions. It is especially present in Europe and increasingly in the US, which is mostly where consumers care more about climate action.
We've seen companies actually adopting targets for products sold in Europe that are not applicable to products sold elsewhere.
The European Union is currently reviewing its consumer protection legislation, in particular in the context of green claims and greenwashing. As part of that there is an ongoing discussion on implementing a ban on 'carbon neutrality' claims.
- Do misleading claims really matter? -
It's preventing consumers and regulators from understanding why we need to transition and why we need to adopt behavioural changes, why we need to make costly investments, why we need to adopt regulation of emissions.
Because if you can do everything in a carbon neutral way already -- you can fly in a carbon neutral way, you can eat carbon neutral hamburgers and whatnot -- then why change?
On climate, most corporations more talk than action
Paris (AFP) Feb 13, 2023 -
The world's biggest and richest companies are failing to deliver on their climate pledges, according to an in-depth analysis released Monday that calls on governments to crack down on corporate greenwashing.
Under growing pressure from shareholders, governments and consumers, companies are racing to roll out strategies to reduce the carbon emissions of their operations, along with their products and services.
Twenty-four multinationals examined have all endorsed the Paris treaty target of capping global warming at 1.5 degrees Celsius, and aligned themselves with UN-backed campaigns to ensure that business plays its part in decarbonising the global economy.
Staying under that critical temperature threshold will require slashing global greenhouse gas emissions 45 percent by 2030, and reaching "net zero" -- with any residual emissions balanced by removals -- by mid-century, the UN's IPCC science advisory panel has said.
But the 2030 pledges of the 22 companies that made them would only slice 15 percent off their collective emissions, the report found.
And net zero targets adopted by all 24 multinationals -- if met -- would barely remove a third of their current emissions.
"The overwhelming majority of these corporations are simply not delivering the goods they promised," the 2023 Corporate Climate Responsibility Monitor concluded.
Climate think tanks Carbon Market Watch and NewClimate Institute did a deep-dive into sectors ranging from the auto, shipping and aviation industries, to retail fashion, high tech and food, to steel and cement. No oil or gas companies were included.
- Vague 'net zero' pledges -
With combined earnings of more than $3 trillion, the two dozen companies under the microscope account for some four percent of all global emissions -- two billion tonnes of CO2 or its equivalent each year.
Analysts assessed the integrity of each corporation's climate plan, looking at the accuracy of self-reported emissions, targets set for reducing them, progress to date, and how heavily pledges depend on questionable compensation schemes known as carbon offsets.
"At a time when corporations need to come clear about their climate impact and shrink their carbon footprint, many are exploiting vague and misleading 'net zero' pledges to greenwash their brands while continuing with business as usual," said Carbon Market Watch executive director Sabine Frank.
Earning the best overall marks was shipping giant Maersk, whose plan for erasing its carbon footprint by 2040 was deemed to have "reasonable integrity".
The climate plans of eight corporate giants -- including Apple, Google, Microsoft and steel-conglomerate ArcelorMittal -- were judged to have "moderate integrity".
Swedish fast-fashion retail giant H&M, also in this tranche, has very ambitious emissions reduction targets, but parts of its green strategy could undermine them, the report found.
"The company's plans to switch to biomass and renewable electricity credits (RECs) in the supply chain could severely undermine those targets," NewClimate Institutes's Silke Mooldijk told AFP.
Biomass is associated with deforestation and CO2 emissions, and the purchase of RECs "allows companies to report emission reductions that are not real," according to a recent study in Nature Climate Change.
- Junk carbon credits -
When asked to comment, H&M "welcomed" the new report and outlined steps it is taking to achieve its "100 percent renewable electricity goal for our and our supplier's operations", but sidestepped the question of biomass and RECs.
The climate claims of another 11 companies were found to have "low integrity," and four -- American Airlines, Samsung Electronics, retail food giant Carrefour, and JBS, the largest meat processing company in the world -- were all tagged with "very low integrity".
Carrefour objected to the ranking, saying the company had set emissions reduction goals across its entire value chain, and was the only large French food retailer ready to cut off suppliers lacking their own climate strategies.
JBS said the report had not taken into account written clarifications provided to the authors, but did not say what they were.
American Airlines and Samsung did respond when contacted by email.
"Regulations are needed requiring companies to reduce their emissions, and regulating what they can -- and cannot -- say to consumers," Carbon Market Watch policy lead Gilles Dufrasne told AFP.
"The short term action that's needed is to ban carbon neutrality claims," he added. "If the company wants to buy junk carbon credits that don't represent anything, they're free to do so, but they're not free to make false and misleading statements."
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