Investing sustainably in energy transition minerals
by Vicente Vicuna, Ava Scott, Njomza Miftari, Maria-Yassin Jah, Ben Lepley
View post
Since the beginning of companies making claims regarding their sustainability credentials, there have been some so desperate to jump on the eco-bandwagon that they make false declarations. This behaviour was originally termed ‘greenwashing’ in the 1980s, but some 40 years on, the washing machine has been fully loaded with new terms and colours. So, this lexicon of labelling is here to help you avoid being hung out to dry:
A company makes misleading claims about its environmental credentials to get people interested in purchasing / using products. This is also an umbrella term most frequently used when referring to other types of false or unsubstantiated sustainability claims.
A company shifts the blame onto its customers by offering them the opportunity to pay extra to ‘offset’ any environmental impact of a product or service.
A company regularly changes its ESG targets before they are achieved. This means the company avoids accountability around progress made, and never actually achieves the goals.
A company hides in a group, usually of peers or broader industry, and moves at the speed of the slowest adopter of sustainability policies. This is similar to a ‘race to the bottom’ and allows a company to avoid committing to ambitious targets.
A company spotlights a particularly green feature of its operations or products. This tactic aims to draw attention away from environmentally damaging activities being conducted elsewhere.
A company markets something as green or sustainable, but closer examination reveals this to be misleading. This can also take the form of companies using green colours and natural imagery like forests, leaves, and plants to suggest that a product is ‘greener’ than it is.
A company chooses to under-report or hide green / ESG credentials from public view for fear of being accused of greenwashing. Whilst this isn’t as problematic as making overtly false claims, it can be an enabler for greencrowding and can pose a reputational risk to businesses if they are not seen to be doing enough sustainability-related work.
Greenwashing, although often an umbrella term, primarily refers to environmental claims. Other types of washing have been defined for specific problems that arise in the face of broader sustainability challenges, targets and reporting.
A company that makes claims about supporting the LGBQT+ community without actively actioning this support. This is particularly notable during Pride Month, where companies may change logos to have rainbows without making further contributions to support or advocate for the wellbeing of the LGBTQ+ community.
A company that makes claims about its business operations or products actively promoting community and social impact, but without following through on such commitments. An example of this could be a large retailer asking consumers to donate small amounts to a charity at point-of-sale, but not contributing to the same cause itself.
A company that is a signatory to the United Nations Global Compact or uses the UN Sustainable Development Goals to indicate they are working to be sustainable, but without actively committing to or reporting progress on any such activity.
A company that uses discourse on equality, while actually being involved in activities that disadvantage women. This could take the form of advertising hygiene products by celebrating female empowerment, whilst those products still have a pink tax (a higher price point than products marketed at men).
This article was written by Emily Williams, Researcher - EMEA.