This is the second installment of a series titled "Transitioning from Sustainability Talk to Action." It addresses the question of how organizations, whether in the private or public sector, can avoid being labeled as greenwashing. Authored by Ajay Kasarabada, P.E, AVP and Director of Environmental Solutions at Black & Veatch, the article explores the actions organizations should take to demonstrate genuine efforts in addressing climate change.
Climate change, particularly the global warming caused by human-generated greenhouse gases (GHGs), is arguably the most significant megatrend on our planet today. With growing demands from markets, customers, and government policies, organizations of all sizes, both public and private, are making commitments to reduce GHG emissions, aiming to contribute to solving the problem. These commitments go by various names such as net zero, carbon neutral, and expanded commitments encompassing environmental, societal, and governance (ESG) factors, as well as sustainability and others. Rather than questioning the authenticity of these commitments or whether they serve as mere public relations or market capture strategies, this article focuses on the steps organizations can take to genuinely make a difference in addressing climate change.
The world of climate stakeholders is diverse and extensive, but can generally be categorized into two groups: information generators (e.g., reporters, employees, software providers, and auditors) and information users (e.g., regulators, customers, analytics platforms, investors, lenders, and the public). The activities of these groups are guided by climate frameworks and standards, including a variety of frameworks such as CDP, CDSB, UNSDG, GRI, IIRC, SASB, GHG Protocol, and others. The Science Based Targets initiative (SBTi), a collaboration between CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact (UN Global Compact), has established a widely accepted net-zero standard. This standard provides organizations with a four-step guide to limit global temperature rise to less than 1.5 °C by 2050:
Prioritize rapid and substantial emission reductions. Establish both short-term and long-term targets. Refrain from making net-zero claims until long-term targets are achieved. Go beyond the organization's immediate value chain. Climate change, particularly the global warming caused by human-generated greenhouse gases (GHGs), is arguably the most significant megatrend on our planet today. With growing demands from markets, customers, and government policies, organizations of all sizes, both public and private, are making commitments to reduce GHG emissions, aiming to contribute to solving the problem. These commitments go by various names such as net zero, carbon neutral, and expanded commitments encompassing environmental, societal, and governance (ESG) factors, as well as sustainability and others. Rather than questioning the authenticity of these commitments or whether they serve as mere public relations or market capture strategies, this article focuses on the steps organizations can take to genuinely make a difference in addressing climate change.
The world of climate stakeholders is diverse and extensive, but can generally be categorized into two groups: information generators (e.g., reporters, employees, software providers, and auditors) and information users (e.g., regulators, customers, analytics platforms, investors, lenders, and the public). The activities of these groups are guided by climate frameworks and standards, including a variety of frameworks such as CDP, CDSB, UNSDG, GRI, IIRC, SASB, GHG Protocol, and others. The Science Based Targets initiative (SBTi), a collaboration between CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact (UN Global Compact), has established a widely accepted net-zero standard. This standard provides organizations with a four-step guide to limit global temperature rise to less than 1.5 °C by 2050:
According to SBTi, net-zero is defined as the algebraic sum of an organization's scope 1, 2, and 3 emissions. To achieve net-zero under the SBTi standard, most organizations will need to decarbonize by up to 90 to 95 percent.
If you search the web and examine a selection of climate commitments made by organizations, regardless of their size, you will find some of the summarized commitments below, depending on the nature of their business.
Achieving carbon neutrality by 2050 Reducing scope 3 GHG footprint by 25% by 2035 Decreasing scope 3 GHG footprint by 30% by 2030 Reducing GHG emissions by 30% and sourcing 60% of electricity from renewable energy by 2030, aiming for carbon neutral operations by 2050 Achieving a one-third reduction in scopes 1 and 2 by 2030 and carbon neutrality by 2050 Attaining net-zero carbon dioxide (CO₂) emissions for self-generated electricity and electrifying the entire light-duty fleet by 2030 Reducing carbon emissions by 70% by 2030 (compared to 2005 levels) and aiming for net-zero carbon emissions by 2045If you search the web and examine a selection of climate commitments made by organizations, regardless of their size, you will find some of the summarized commitments below, depending on the nature of their business.
This selection of commitments showcases both short-term and long-term goals. However, there may be some ambiguity surrounding the definitions of carbon neutrality and net-zero, as well as the coverage of all scopes. As a result, stakeholders within the climate groups may seek clarification on these commitments.
What is Greenwashing?
In a UN report titled "Integrity Matters" that examines net-zero emissions commitments of non-state entities, UN Secretary General António Guterres emphasizes the importance of businesses, investors, cities, states, and regions delivering on their net-zero promises. He states, "We cannot afford slow movers, fake movers, or any form of greenwashing."
According to the Merriam-Webster dictionary, greenwashing refers to the act or practice of presenting a product, policy, or activity as more environmentally friendly or less damaging than it actually is. As stakeholders become more knowledgeable about the vocabulary associated with GHG commitments, such as water positivity, nature positivity, triple bottom line, and various acronyms like ESG, CSR, DEI, LCA, EJ, TCFD, TNFD, the scrutiny surrounding greenwashing accusations is increasing. In this era of heightened awareness driven by social media and intense stakeholder scrutiny, organizations must take steps to avoid being accused of greenwashing, especially concerning their commitments.
Three Steps to Address Greenwashing Concerns
Although GHG commitments are relatively new, our experience working with companies and organizations has provided valuable insights into the bigger picture. Based on this experience and our internal reflections at Black & Veatch, we recommend three steps that organizations can take to mitigate greenwashing concerns.
Emphasize transparency and accountability.
Establish a sustainable team with diverse composition and empower them.
Engage and involve employees in the commitment journey.
Transparency and Accountability
To ensure transparency, it is crucial to establish meaningful targets and goals that align with recognized standards like SBTi or UNSDG. This alignment will bring clarity to the emissions scopes (i.e., scopes 1, 2, and/or 3) that contribute to net-zero or carbon neutral commitments. It is also important to identify software tools that can accurately collect, track, record, and analyze data related to emissions from all scopes. Reviewing software demos from vendors can help in selecting the most suitable tool for your organization. Seeking verification and validation from independent third parties such as NGOs or certified environmental consultants and periodically reporting data will demonstrate a commitment to transparency and accountability.
Sustainability Team Composition and Empowerment
Sustainability teams and leaders responsible for developing commitments should be provided with the necessary resources to carry out their work effectively. Encouraging innovation and providing training on understanding the balance between commitments, business impact, and environmental impact is essential. These teams, equipped with a comprehensive understanding of this balance, should be empowered to drive changes in organizational processes. However, it can be challenging as sustainability teams often lack the authority to approve infrastructure changes required to achieve net-zero goals. Effective communication is crucial, and organizations that can swiftly translate plans into action will be at the forefront of deploying projects and making investments that support decarbonization.
Furthermore, sustainability teams need to evaluate land/nature-based, water-based, and supply chain-based data that contribute to emissions-based commitments. This holistic approach will help develop a well-thought-out plan for climate stakeholders. For further insights, refer to my previous article in this series where I discussed three themes that facilitate the transition from sustainability talk to action.
Taking Your Employees Along
During a recent ILO meeting hosted by Black & Veatch at Greentown Labs in Houston, Jodie Brinkerhoff, Vice President of Innovation and Strategy at Dallas Fort Worth International Airport (DFW), emphasized the importance of organizations winning the hearts and minds of their employees to embrace net-zero commitments. When employees understand the purpose behind their actions and their role in the organization's journey to meet GHG commitments, changes are more likely to be embraced smoothly. For example, I worked with a large company that provided training on renewable energy technologies, energy efficiency technologies, and advanced transportation concepts to all shop floor and manufacturing operators and supervisors. The company believed that involving employees in the transition to more efficient processes and green energy would foster openness and willingness to adapt rather than resistance to change.
What is Greenwashing?
In a UN report titled "Integrity Matters" that examines net-zero emissions commitments of non-state entities, UN Secretary General António Guterres emphasizes the importance of businesses, investors, cities, states, and regions delivering on their net-zero promises. He states, "We cannot afford slow movers, fake movers, or any form of greenwashing."
According to the Merriam-Webster dictionary, greenwashing refers to the act or practice of presenting a product, policy, or activity as more environmentally friendly or less damaging than it actually is. As stakeholders become more knowledgeable about the vocabulary associated with GHG commitments, such as water positivity, nature positivity, triple bottom line, and various acronyms like ESG, CSR, DEI, LCA, EJ, TCFD, TNFD, the scrutiny surrounding greenwashing accusations is increasing. In this era of heightened awareness driven by social media and intense stakeholder scrutiny, organizations must take steps to avoid being accused of greenwashing, especially concerning their commitments.
Three Steps to Address Greenwashing Concerns
Although GHG commitments are relatively new, our experience working with companies and organizations has provided valuable insights into the bigger picture. Based on this experience and our internal reflections at Black & Veatch, we recommend three steps that organizations can take to mitigate greenwashing concerns.
Emphasize transparency and accountability.
Establish a sustainable team with diverse composition and empower them.
Engage and involve employees in the commitment journey.
Transparency and Accountability
To ensure transparency, it is crucial to establish meaningful targets and goals that align with recognized standards like SBTi or UNSDG. This alignment will bring clarity to the emissions scopes (i.e., scopes 1, 2, and/or 3) that contribute to net-zero or carbon neutral commitments. It is also important to identify software tools that can accurately collect, track, record, and analyze data related to emissions from all scopes. Reviewing software demos from vendors can help in selecting the most suitable tool for your organization. Seeking verification and validation from independent third parties such as NGOs or certified environmental consultants and periodically reporting data will demonstrate a commitment to transparency and accountability.
Sustainability Team Composition and Empowerment
Sustainability teams and leaders responsible for developing commitments should be provided with the necessary resources to carry out their work effectively. Encouraging innovation and providing training on understanding the balance between commitments, business impact, and environmental impact is essential. These teams, equipped with a comprehensive understanding of this balance, should be empowered to drive changes in organizational processes. However, it can be challenging as sustainability teams often lack the authority to approve infrastructure changes required to achieve net-zero goals. Effective communication is crucial, and organizations that can swiftly translate plans into action will be at the forefront of deploying projects and making investments that support decarbonization.
Furthermore, sustainability teams need to evaluate land/nature-based, water-based, and supply chain-based data that contribute to emissions-based commitments. This holistic approach will help develop a well-thought-out plan for climate stakeholders. For further insights, refer to my previous article in this series where I discussed three themes that facilitate the transition from sustainability talk to action.
Taking Your Employees Along
During a recent ILO meeting hosted by Black & Veatch at Greentown Labs in Houston, Jodie Brinkerhoff, Vice President of Innovation and Strategy at Dallas Fort Worth International Airport (DFW), emphasized the importance of organizations winning the hearts and minds of their employees to embrace net-zero commitments. When employees understand the purpose behind their actions and their role in the organization's journey to meet GHG commitments, changes are more likely to be embraced smoothly. For example, I worked with a large company that provided training on renewable energy technologies, energy efficiency technologies, and advanced transportation concepts to all shop floor and manufacturing operators and supervisors. The company believed that involving employees in the transition to more efficient processes and green energy would foster openness and willingness to adapt rather than resistance to change.