Greenwashing: Climate pledges put under spotlight
While certainly an improvement over past years when a pledge to do 10% better was the standard, the trend has triggered scepticism that greenwashing is really what’s at work. Soon, however, there won’t be anyplace left to hide, especially for companies that quietly use lobbying to keep climate regulation at bay.
Late last year, a group of investors with $6.5 trillion (€6trn) in assets under management asked 47 of the world’s biggest greenhouse gas emitters to align their climate efforts with the Paris Agreement’s climate goals. And that was just the beginning. “These mixed messages threaten our collective ability to avoid catastrophic climate change,” Adam Kanzer at BNP Paribas Asset Management, said at the time. This year, many of those proposals are focused on whether corporate interests are undercutting efforts to fight global warming.
Companies that say they are planning to go carbon neutral, but still spend millions to fight climate legislation, may face some serious backlash when their conflicts are revealed. In the oil and gas sector, the annual climate lobbying spend of the five largest public companies is $201m, according to InfluenceMap, with an additional $195m for climate positive branding.
BP, which has fought carbon taxes and supported diluted federal reviews of its environmental impact, proclaimed last week that it would look at lobbying as part of a new net-zero plan.
The oil giant says it plans to “stop corporate reputation advertising and redirect resources to active advocacy for progressive climate policies”.
The details of how this company—part of an industry largely responsible for the climate crisis—will accomplish such goals have yet to be revealed. The investment industry isn’t escaping scrutiny, either.
While asset managers pledge to push clients toward accountability, some of those same financial professionals privately raise money for climate deniers. With more institutions and pension funds professing a commitment to green investing, they might be less willing to have their money managed by people pushing the other way.
Already, the ball has moved further downfield. Next comes trade associations: Investors are pushing companies to re-evaluate trade group memberships. While Apple and Nike long ago left the US Chamber of Commerce over its climate change position, groups like Alec, the US Plastics Industry Association and even the Grocery Manufacturer’s Association are facing increasing scrutiny as well.
“Within two years, if your company’s climate policies aren’t aligned with your corporate sustainability targets on climate, you’re going to be seen as two-faced,” JP Leous at the World Resources Institute, warned a room full of corporate sustainability professionals at the GreenBiz conference in Arizona earlier this month.
Deadly wildfires are forcing Australian pension funds to confront whether their investments are green enough and UK pensions may be forced to report how they are affected by climate change. Meanwhile, RBS plans to cut fossil fuel loans and be climate positive by 2025, the New York State’s pension fund bet $800m on ESG credit, and KKR closed its debut global impact fund at $1.3bn.
