Going all out and the risk of inadvertent greenwashing
(Photo: Susan Holt Simpson, Unsplash; modified by The Sustainable Investor)

Going all out and the risk of inadvertent greenwashing

Greenwashing is not always malevolent. As Boards shift their focus to include a broader range of shareholder interests, they need to be sure they understand what 'additionality' they are actually providing.

Summary: An over focus on aggregate scoring brings with it the risk that a business tries to go all out and address everything rather than focusing on the relevant and the possible. That brings with it the danger that a business falls into the trap of inadvertently greenwashing. Strategic decision-makers, investors and communicators need to consider the 'additionality' of their sustainability initiatives as well. We look at additionality with regards emissions and scope3 but also how it applies in diversity and inclusion. We take a look at some greenwashing issues to think about with investment products including briefly touching on the FCA regulations being proposed.

Why this is important: Stakeholders from investors through to people in the community at large are becoming less enthralled with offsetting as a primary measure. They want to see additionality in an organisations actions. And communication that matches those actions, not oversells it.

The big theme: As a broader group of stakeholder interests have come to the fore including employees, customers and the community at large there has been a shift in thinking from not just considering the impacts 'of' the environment, social and governance aspects and how they impact a business but also the impact of the business 'on' the environment and society as a whole. In other words, considering the business as part of a broader ecosystem. With that in mind, if businesses understand how they fit into that ecosystem and the materiality and relevance of their actual and potential impact, they can be the most effective and avoid the traps of inadvertent greenwashing. They can be genuinely additional, both in terms of return and the sustainability transition.



The details


In a previous blog, 'Double materiality: the 'on' and 'of' switch', I highlighted that the concept of relevance sits hand-in-hand with materiality. For something to be material it has to matter to the business and its stakeholders. It has to be relevant.

Double materiality reflects a shift in thinking from not just considering the impacts 'of' the environment, social and governance aspects and how they impact a business but also the impact of the business 'on' the environment and society as a whole.

The UN Sustainable Development Goals were designed to encompass all of the various facets in the route to bringing "peace and prosperity for people and the planet." The aim was a shared or collective plan where the planet is thought of as a complete ecosystem.

This post is for subscribers only

Subscribe
Already have an account? Log in