The quietening of sustainability

In this special guest blog, IEMA member Sally Annett, Marketing Manager for Interact discusses how many organisations are choosing not to publicise details of their sustainability targets, to avoid allegations of greenwashing.

The commercial, reputational, and legal risks of greenwashing are growing. Two of the world’s largest banks, Deutsch Bank and HSBC, recently came under fire for greenwashing. DWS, a subsidiary of Deutsche Bank, is facing allegations of greenwashing over exaggerating the sustainability of investments and HSBC’s ‘climate change’ adverts were ruled ‘misleading’ by the Advertising Standards Authority (ASA).

Claims of greenwashing have become increasingly widespread as consumer environmental consciousness grows, and marketing departments are finding themselves under pressure to promote their companies’ environmental credentials. The problem really comes when companies focus on storytelling, rather than on actual environmental impact.

In response to EU studies that found more than half of environmental claims were misleading, the EU Directorate-General for Environment has just released a ‘Green Claims Directive’ which will, in their words, ‘continue to address the identified problem of greenwashing and unreliable environmental labels’. The Financial Conduct Authority (FCA) has also proposed a set of rules, due to be published by the end of 2023, to tackle greenwashing, meaning that firms will face increased scrutiny into green credentials of their services and products.

Against that background, it comes as no surprise that, to avoid allegations of greenwashing, many large companies are choosing not to publicise details of their sustainability targets, a practice known as green-hushing. Climate consultancy South Pole discovered that, out of a survey of 1200 private companies considered global climate leaders, approximately one quarter did not publicize their sustainability achievements and milestones.

However, if companies do choose to publicise their sustainability initiatives, in addition to helping their marketing teams do their jobs, they can provide a valuable sustainability blueprint for other companies and sectors. In the case of AWS, its novel approaches to the build environment (documented in their 2023 Sustainability report) are providing a use case for the wider construction sector and creating a market for low-carbon construction materials. What is not mentioned in the report is the creation of its first seaweed farm (located next to an offshore wind farm), an investment in new carbon capture technology that has other environmental benefits.

Understand your impact

The answer to avoiding greenwashing and its opposing trend green-hushing is to first understand the true environmental impact of your activities. Having run IEMA training courses for organisations in both the private and public sector, we know that progress can be measurable and is achievable if you understand what you are doing and create a plan to get there.

Procrastinating about incorporating sustainability practices into a business strategy is no longer an option. As the focus on environmental issues, including carbon production, waste disposal and sustainable solutions, increasingly falls on companies across all industries, the time to act on understanding your environmental impact is now. We have found training is an excellent way to do this.

Many of the UK government supplier frameworks have a carbon reduction plan (CRP) as a pre-requisite. Companies large enough to be in scope for the Energy Savings Optimisation Scheme (ESOS) would also have to demonstrate energy and carbon reductions over time. Tenders and frameworks also ask for a social value statement and supporting evidence on this and a carbon reductions plan as a pre-requisite. Policies on carbon, environment, circular economy and diversity and inclusion are also helpful.

The Corporate Social Reporting Directive (CSRD) will soon require large EU companies to report, not only on their environmental impact, but also on social responsibility (including codes of conduct for companies and its supply chain). The Fit for 55 initiative mentioned in the CSRD means that all companies in scope will have to report a 55% reduction in emissions by 2030 making an understanding of pathways towards net zero essential.

Risks and opportunities

Traditionally, environmental management has focused on managing negative risks. Increasingly, however, environmental issues are being seen as a way to create opportunities. IEMA categorises environmental risk as:

‘something from the environment that poses a risk to an organisation, individual, country, etc., such as climate change, flood risk, energy security etc. Or something that an organisation does which poses a risk to the environment, such as water pollution, greenhouse gases, or biodiversity loss’.

Conversely, environmental opportunities are issues related to the environment that create products or services such as employment or builds that are resilient to the climate. An excellent example of this comes from public transport provider Arriva’s environmental improvement programme ‘Destination Green’. Recognising its own impact on the environment, Arriva has implemented a trial of its ride-sharing app to encourage transport users to choose a cheaper and more sociable minibus journey rather than using their own energy-intensive cars.

The lesson for businesses is to publicise their specific initiatives arising out of environmental opportunities, rather than making sweeping environmental claims that don’t stand up to scrutiny by regulatory bodies such as the ASA or FCA.

Advertise ‘doing good’

Instead of muzzling your marketing team, there is a clear pathway for an organisation to follow to ensure that it can publicise its sustainability initiatives with confidence. This is: understand your impact, measure and verify your impact and finally publicise specific impacts, rather than ‘stories’ around vague environmental claims. Advertise what you’re doing ‘right’ and reap the rewards, whether these come in increased employee engagement and retention, investment opportunities or greater marketing ‘reach’. If you are making an impact, shout about it. You might just be a use case for the next wave of sustainability initiatives.

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Additional information:

Interact and Sustainable Technology

Interact’s granular reporting and consultancy enables companies with server estates to reduce energy, carbon and cost in line with Net Zero pathways.

Interact is a Sustainable IT company that uses industry knowledge, leading research and extensive analysis to recommend projects and actions designed to transform enterprise and data centre efficiency and optimise server estate performance, saving companies in terms of energy, carbon and cost.

If you want to know more about how Interact are working to reduce the environmental impact of the world’s surging demand for data, you can learn more here.

You can also find out more about our IEMA-certified sustainability training here.

Please note: the views expressed in this blog are those of the individual contributing member and are not necessarily representative of the views of IEMA or any professional institutions with which IEMA is associated.