Corporate Greenwashing: An Obstacle on the Road to Net Zero

Corporate GreenwashingAn Obstacle on the Road to Net Zero

Thomas Perrett argues that government intervention is required to counteract the problems posed by companies focused on PR rather than reducing CO2 emissions

The Prime Minister was recently criticised by the head of the Climate Change Committee (CCC), which published two reports last month showing that the UK is failing to meet its target of cutting greenhouse gas emissions by 78% by 2035.

While Lord Deben acknowledged that the Government’s targets were “remarkable” and had “set a major example”, he said that “the policy is just not there” and that “it’s very clear we need to step up very rapidly”. 

Ahead of November’s COP 26 conference on climate change in Glasgow, the Government is still falling behind on its stated ambitions for reaching net zero carbon emissions by 2050.

According to Climate Home News, Chris Stark, CEO of the CCC, told a press briefing that the Government had made “woeful” progress on reducing emissions from agriculture and land use. “Targets are not going to be achieved by magic,” he added. “Surprisingly little has been done so far to deliver on them.”

A major reason for this failure is the pernicious influence of corporate ‘greenwashing’, which allows companies to create a false impression that they are working to reduce their emissions, while continuing to benefit from fossil fuel usage. 

Corporate greenwashing is one of the most common ways in which businesses can feign an environmentalist strategy for PR purposes, while failing to tangibly commit to reducing their carbon emissions. The subtle but effective tactics – which range from intentionally reducing the intensity of carbon emissions while covertly increasing the amount of overall emissions and claiming to offer a “carbon neutral” alternative to the public, to investing in as yet-unproven Carbon Capture and Storage (CCS) technologies – have bedevilled the Government’s ability to reach its net zero targets.

SSE, one of the UK’s major electricity suppliers and a partner of the COP 26 Climate agreement, is currently building a new gas plant in the UK. Barclays Bank, despite having been a founding member of the UN-backed Net Zero Banking Alliance, an organisation which brings together 53 banks from 27 countries which all commit to achieving net zero emissions by 2050, was one of the top 10 banks financing fossil fuel projects between 2016 and 2020, according to a report by environmental organisation the Rainforest Action Network. 

Even Mark Carney, the UK’s climate envoy and former governor of the Bank of England, used an unrecognised and discredited definition of ‘net zero’ in touting the environmental credentials of Canadian asset firm Brookfield Asset Management, which he joined in 2020. He asserted that the “avoided emissions” the company had achieved through its investments in carbon capture technology would offset the emissions resulting from its fossil fuel investments.

Carney’s comments were criticised by Dr Ben Caldecott, director of Oxford University’s sustainable finance programme, who reportedly said that “many large asset managers have investments in clean energy. This doesn’t undo their investments in fossil fuels. It absolutely doesn’t make them net zero today”. 

British airline firms EasyJet and British Airways, in offering customers ‘carbon-neutral’ flights, have engaged in greenwashing by investing in carbon capture technologies and carbon offsets in lieu of decarbonising their own aviation technology.

Despite having encouraged their customers to “fly carbon neutral” by purchasing credits for carbon offsets, a study by Brussels-based environmental campaigning group Transport and Environment found that British Airways’ flights had emitted 18.4 million tonnes of CO2 during 2019. This figure fell only slightly short of the 19.4 million tonnes emitted cumulatively by every van driven in Britain the previous year – indicating that carbon capture and offsetting are insufficient replacements for concerted decarbonisation initiatives.

Furthermore, according to an investigation by Greenpeace Unearthed and the Guardian, which analysed 10 offsetting projects that major airlines relied upon, the scale of the carbon benefits accrued by these offsetting schemes is “impossible to verify and may be exaggerated”.

This demonstrates that corporations cannot be trusted to undergo significant internal strategic changes to reduce their carbon emissions of their own volition and that state intervention has a crucial role to play in holding to account the companies with cynical PR tactics which have allowed them to continue emitting considerable amounts of CO2 while attempting to rebrand themselves as carbon neutral.

A recent Dutch court ruling against Shell, in which the oil giant was compelled to cut its CO2 emissions by 45% by 2030 relative to 2019 levels, represents a potential watershed in how effective legislation and the enforcement of accountability can provide a counterweight to corporate greenwashing.

That Shell had previously pledged to reduce the intensity of its emissions by 20% by 2030 from 2016 levels, without acknowledging that an increase in fossil fuel production could result in higher emissions overall, indicates the duplicity of major oil companies in disclosing the implications of their climate targets – and the extent to which these companies will go to avoid complying with international climate policy. 

A pragmatic, state-led approach to tackling corporate greenwashing must also oppose the cynical use of carbon offsets and carbon capture investments as methods of concealing the harmful impact of companies’ fossil fuel investments.

According to a 2019 study by Imperial College London, for instance, deploying effective carbon capture technology on a global scale would require an estimated 0.4 to 1.2 billion hectares of land, which is between 25% and 80% of the cropland currently in use for agricultural purposes. Research by Greenpeace has found that the benefits of carbon dioxide removal are negligible with a 2021 report by the charity concluding: “While such protection is necessary, it cannot be considered part of a net-zero plan, since it is required in addition to, rather than in alternative to, emissions reduction.”

For as long as companies can use the veneer of PR to disguise the true impact of their CO2 emissions, it will be difficult for governments to meaningfully address the challenges posed by decarbonisation. The UK is already lagging behind its objectives – it is time for pragmatic state intervention to counteract the obstacle posed by corporate greenwashing.