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Note: this video covers the same topic.
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I’m convinced that greenwashing – exaggerating or fabricating environmental credentials – is on a way out. It’s becoming a…
vanishing concern
But don’t pop that bottle of Bollinger just yet - there’s something worse than greenwashing … something elusive and indistinct in its causes but obvious and detrimental in its effects.
Before we come to that, let’s clarify: why is greenwashing on a way out?
In 2023, most medium-large companies already have their sustainability approach nailed down.
They’re implementing their corporate sustainability strategy, ESG framework, climate adaptation plan, net zero pathway, or similar.
What started as a single tree trunk (e.g. energy reduction), from which a second branch shot off (e.g. waste reduction and recycling), then a third branch (e.g. water reduction), has now, ten years later, grown into a bushy, established tree, with a broad canopy that is constantly branching off in all possible directions. (And, as those familiar with ESG reporting know, the level of granularity and explicitness is sometimes bordering on overgrowth.)
This dynamic process of branching off means that there’re lots of junctures, buds, nodes, angles, creases, bends, pieces of bark shedding and new emerging, leaves, and entire new branches. In other words, a lot of data, information, and stories under the broad sustainability canopy. This development is usually summed up on the second page of an ESG report (or equivalent) titled ‘Message from the CEO’.
These days, companies have plenty of green puzzle pieces..
..to show the world, because they have PARTICULARIZED themselves: broken everything down into small, detailed, explicit parts, like a jigsaw puzzle.
For example, they can easily claim, and prove: reduced energy usage by 14% … reduced carbon emissions by 19 tonnes of CO2 … nine tonnes of single-use plastics avoided by switching to recyclable paper packaging … 13,000 trees planted under a carbon offset … seven tonnes of paper reduced by digitalization … that switching to a new foam soap uses 45% less water and is free of allergy-triggering dyes and fragrances … and other green puzzle pieces.
None of that^^ is greenwash. It’s all legit and they can back it up.
Why do companies bother with sustainability and report in such detail?
Because they have no other option:
Shareholders, investors, private equity, and banks demand it (ESG)
Prospects/clients/customers expect it
Increasing general public awareness and concern about climate change and the destruction of nature
Insurability of the business
Expanding sustainability requirements
Ability to attract the best talent (‘beyond bottom line’ employers)
Increased domestic regulations and compliance (national/state government-driven)
Fear of being banned from markets that put the environment/low- carbon high on the agenda, e.g. EU (international treaties/trade agreement-driven)
In some companies, such as Patagonia or Timberland, existing long- term ethos, visionary founders
Concern about reputational damage from not doing enough
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Ten years ago, in Australia, sustainability was a kind of ‘nice to have,’ ‘let’s-chuck-a-recycling-bin-in-a-corner-and-bring-a-water-bottle’ kind of thing.
Today, it has definitely moved beyond the water bottle, and for many companies, it isn’t too far behind the bottom line.
Therefore, the question is:
Why would any sane company in 2023 be greenwashing?
To risk reputational damage?
To upset their current, and potential customers, who are better educated (and more demanding) than ten years ago?
To risk investigation and fines from the regulators?
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Companies don’t have to greenwash. As we’ve seen, they can simply show one, two, or five true and legitimate green puzzle pieces. Things they’re actually doing and can prove it (e.g. reduced emissions).
On the one hand, rising PARTICULARIZATION is good news – greenwashing is dying…
On the other hand, rising PARTICULARIZATION poses new threats – more dangerous and less obvious than greenwashing.
(PARTICULARIZATION, detailed in the previous article, is a process of breaking organizations down into small, detailed, explicit parts, like a jigsaw puzzle.)
As companies have plenty of green puzzle pieces that are true and legitimate (unlike greenwashing), they can pick one, two, or three and keep hammering them home over and over.
That way, they can misdirect, and draw attention away from the important issues
People have limited bandwidth and shortened attention spans, and once they hear two or three true and legitimate claims from a company, they may believe, for example, that recyclable packaging is safeguarding nature.
Other examples of particularization are:
A luxury beach resort in Maldives supplying bamboo toothbrushes (“ending plastic waste!”) but flying in wagyu beef from Argentina.
A hotel chain encouraging to use the same towel twice (“reducing our carbon footprint!”) but not using renewable energy, and encouraging to take short showers but importing bottled water from Norway.
A chocolate company bragging about recyclable packaging but driving deforestation in Ivory Coast (where most cocoa is grown).
A mining company showing rehabilitated mine (“greening our footprint!”) while simultaneously expanding coal mining.
A car manufacturer showing a new electric car (“securing clean mobility!”) but destroying primary rainforests in the Congo to get the EV-minerals.
The problem with this is that these companies are doing something that helps the environment – like the examples above – but overall are harming the environment, and have the social, economic, and environmental license to do so, unlike greenwash.
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Before, when greenwashing was an issue, we had to distinguish true from false, but today…
we have to distinguish which truth is relevant.
Particularization is a different ballgame.
Thanks for reading.
Jan
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