NGOs urge European Union to take action on greenwashing

A group of Non-Governmental Organisations (NGOs) have issues a plea to global governments to toughen up their rules on climate actions after a new report accused leading firms of failing in their claims.

The NewClimate Institute and Carbon Market Watch have published this year’s Corporate Climate Responsibility Monitor (CCRM) which warned, despite claiming to be champions of climate action, two dozen of the world’s largest and richest corporations are “hiding their climate inaction behind the fig leaf of green-sounding ‘net zero’ plans”.

The monitor examined 24 major firms with a combined revenue of over €3 trillion and responsible for some 4% of global emissions.

“Despite their net zero pledges and claims of climate leadership, the overwhelming majority of these corporations are simply not delivering the goods they promised,” The CCRM stated. “In fact, the main shortcomings of companies’ climate targets and plans are largely similar to those identified in last year’s edition of the CCRM.”

“At a time when corporations need to come clean about their climate impact and shrink their carbon footprint, many are exploiting vague and misleading ‘net zero’ pledges to greenwash their brand while continuing with business as usual,” says Carbon Market Watch’s executive director Sabine Frank. “This dangerous procrastination must stop. Since multinationals have both an oversized impact on the planet and the means to reduce their carbon footprint, they must take real action to clean up their act and not just their image by slashing their emissions.”

“In this critical decade for climate action, companies’ current plans do not reflect the necessary urgency for emission reductions,” added Thomas Day, co-author of the report. “Regulators, voluntary initiatives and companies must place a renewed and urgent focus on the integrity of companies’ emission reduction plans up to 2030. The discourse on longer-term net zero should not distract from the immediate task at hand.”

The CCRM stated: “In the vital medium term, when the world needs to almost halve its carbon footprint if we are to keep temperature rises within the relatively safe 1.5°C, the 22 assessed corporations that have a 2030 target commit to delivering a median reduction of a paltry 15% in their real emissions by 2030.

“The outlook is similarly bleak for the longer term. By 2050, it is widely accepted that corporations will need to have reduced their emissions by 90-95% compared with current levels. However, the CCRM calculates that, taken together, the net zero pledges of the 24 corporations amount to a measly 36% by mid-century.”

“Spurious ‘net zero’ and ‘carbon neutrality’ claims are incredibly damaging,” explains CMW’s lead on Global Carbon Markets, Gilles Dufrasne. “They give the illusion that corporations are taking serious action to tackle the climate crisis when, in reality, they are sweeping the problem under the carpet and leaving it to others and future generations to clean up their mess.”

In response to the findings Carbon Market Watch has come up with a set of recommendations for governments and corporations. Foremost among these is that governments must ban the use of misleading terms, such as carbon neutrality and unsubstantiated net zero claims, from companies’ communications.

It added for their part, corporations should voluntarily desist from making these disingenuous claims to avoid the growing reputational damage involved and to reduce the risk of litigation that accompanies such misleading advertising.

“By making such outlandish carbon neutrality claims, these corporations are not only misleading consumers and investors, they are opening themselves up to increasing legal and reputational liability. Governments must act now to make it impossible for companies to make these false and damaging claims,” explained Lindsay Otis, a policy expert on global carbon markets at Carbon Market Watch. “For their part, corporations must stop claiming that they can unequivocally cancel out their harmful climate impact simply by purchasing carbon credits instead of reducing their own emissions. When purchasing carbon credits, these corporations need to accurately communicate to consumers what this action truly amounts to: a contribution, or a donation, to a mitigation project and not a neutralisation of emissions.”

Carbon Market Watch and other NGOs (including Client Earth, ECOS and the EEB) have sent an open letter to the European Union institutions urging them to put in place an airtight ban in order to protect consumers and to “enable them to understand and embrace their role in Europe’s green transition”.

It added: “The European Union has a golden opportunity to restrict this form of corporate greenwashing and set an example for other governments to emulate. The EU institution are in the midst of updating EU consumer protection legislation to better protect consumers against these pervasive greenwashing practices. However, the proposals on the table do not go far enough to put an end to these deceptive claims. Thus, EU policymakers must instate a complete prohibition on all claims of climate or environment-related neutrality or related variations, such as ‘carbon neutral’, ‘CO2 neutral’, ‘CO2 compensated’, ‘climate positive’, and ‘net zero’.”

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