The New Climate Institute in collaboration with the Carbon Market Watch recently released a report that found climate pledges by 25 of the world’s largest companies are, in fact, false.
Companies analysed in the report include Google, Amazon, Ikea, Apple and Nestle, and yet only one of the 25 corporations evaluated had a net-zero pledge with “reasonable integrity”.
These are household names who have made big pledges and fallen short.
While this is shocking, it is not something new.
The Competition and Markets Authority reported that more than 50 per cent of UK consumers are taking environmental considerations into account and are increasingly seeking to shop sustainably. However, it found 40 per cent of green claims made by companies are misleading.
Most companies have made some kind of commitment to the environment, but many have not made it explicit in terms of the products and services they sell. Consequently, key performance indicators such as brand trust, attachment and commitment are badly impacted and brands are at breaking point.
So with climate change high on the agenda, why is greenwashing on the rise?
The reality is many brands do not know how to reach their own sustainability goals they have mapped out.
Consumers expect retailers to share their values on climate change and this is a lot of pressure for companies who are balancing revenue, the impact of Covid-19 on operations and consumer appetite.
Business leaders know there is a problem, but they lack the right technology to act now. Consequently, they are stuck in the old world and in danger of becoming irrelevant.
Sustainability communication platforms can bridge the gap by helping brands to verify, manage, and deliver their sustainable product communications at scale. Powered by artificial intelligence technology, they enable brands to meet their sustainability goals and move ahead of the competition with haste.
Part of the technology behind these platforms is verification technology – software used to verify the accuracy of documents. Using algorithms, supply chain data is used to rank and report product claims.
For example, if a company made certain green claims, the verification technology could confirm if these claims were true or misleading. This does not just provide the customers with knowledge but allows brands to be both credible and scientifically sound.
There is a lot of investor appetite for sustainability, therefore if companies can show they are environmentally sound then they can unlock the potential of increased revenue and shareholder interest.
Armed with the right technology and processes, brands can put an end to greenwashing for good. However, companies need support, not only to be fully compliant in terms of sustainability regulations but also to effectively verify and communicate these credentials to their stakeholders.
This is why sustainability communication is so vital. Last week, the World Economic Forum published a report on the positive impact sustainable credentials can have on business models, products and company value. Therefore, if brands fail to invest, they could find themselves falling on the wrong side of authorities, and history.