2023 must be the year we stop greenwash
Dexter Galvin, global director, corporations & supply chains at CDP, looks at the measures corporates can take to finally cut back on greenwashing by promoting transparency.
In a time when we urgently need to see leadership, transparency and accountability to tackle both the climate and biodiversity crises, companies greenwashing and, conversely, greenhushing are becoming increasingly common.
It is not overly surprising that some companies want to ‘green’ their image without doing the work – this has been known for some time as greenwashing – but now, many are doing quite the opposite and greenhushing by choosing not to publicise the positive work they are doing, such as making science-based targets, for fear of being accused of greenwashing.
Though these may seem to be opposing, disclosure can act as the antidote for both greenwashing and greenhushing. It offers a company a structured way to avoid the accusation of greenwash and simultaneously give them the confidence to communicate their work on climate and nature by providing a universal framework through which to measure commitments. It also allows us to track progress more easily and confirm that businesses are doing more than just making commitments.
The perception of disclosure has shifted in recent years from being a ‘nice to have’ to being a business fundamental. Last year, a record 18,700+ companies disclosed through CDP – 42% more than the previous year.
Disclosure matters as it helps set a strategy that then leads to action. Take climate disclosure – CDP’s data shows that 69% of companies disclosing for a third year have emissions reductions targets, compared to 38% in year one. It can also improve a company’s reputation, boost competitive advantage, uncover risks and opportunities, and track and benchmark progress.
In the past we have said that companies have time to start their climate disclosure journey, but that landscape has shifted and the pace of change needs to be much more rapid.
Getting ready for disclosure – including setting science-based targets, outlining quantifiable reductions, and getting the right governance in place – can be a lengthy process. But with mandatory disclosure fast approaching, companies need to get up to speed or risk falling victim to more aggressive legislation or market trends.
Indeed, the momentum is already here for mandatory climate disclosure, with most major economies planning to adopt some form of it, including the EU’s European Sustainability Reporting Standards (ESRS) in June this year setting pulses racing on how green companies’ commitments really are.
Mandatory disclosure on nature will not be far behind as the agreement at COP15 in Montreal provided the foundations to set a pathway to making biodiversity disclosure a business norm globally.
However, it is still possible for companies to get ahead of the curve for climate and nature disclosure and, we have seen already, the sooner companies disclose, the better it is for business and of course the planet.
Greenwash will end with transparent data and comprehensive transition plans. So, let us build on the momentum and ensure 2023 is the year of disclosure on climate and nature.