Greenwashing Concerns Soar as Companies Vow to Clean Emissions

(Bloomberg) -- On the first day of United Nations climate talks in Madrid, Spain’s top newspapers printed full page advertisements from Endesa SA, the country’s biggest polluter -- and also a key sponsor of the conference.

The Madrid-based utility plans to shut its coal power plants in the Iberian peninsula and boost renewable energy. But the publicity campaign quickly backfired on social media, drawing critics who noted that Endesa remains a major contributor to greenhouse gases. That stirred debate about how to separate the businesses working to protect the environment from those just pretending to do so, or “greenwashing.”

The conference known as COP25 is due to finish on Friday after drawing some 26,000 people seeking to put those issues into focus. Envoys from almost 200 countries are seeking to agree on the final details of implementing the Paris Agreement in which all nations committed to reduce greenhouse gas emissions from burning fossil fuels.

“Some of these companies try and claim they’re compliant with the Paris Agreement, and they are at the same time keeping governments back from being more ambitious,” Jennifer Morgan, executive director of the environmental group Greenpeace International, said at the meeting in Madrid. “I’m hugely doubtful about some of these commitments.”

The criticism by Morgan and other groups like hers calls into question the promises business groups have made to rein in their own emissions.

Last week, the European Union’s biggest business leaders said they would support measures to zero out emissions by the middle of the century. The European Round Table for Industry, which includes household names such as L’Oreal SA’s Jean-Paul Agon, Siemens AG’s Joe Kaeser and BP Plc’s Helge Lund, supported EU’s Green Deal announced Wednesday.

Greenwashing Concerns Soar as Companies Vow to Clean Emissions

Another group, the We Mean Business Coalition, announced a total of 177 companies have committed to reduce emissions in line with the goals set out in the 2015 Paris Agreement. New signatories include Carlsberg A/S, Chanel Inc., Tesco Plc and International Consolidated Airlines Group SA, which owns Iberia and British Airways. They join giants such as Coca-Cola Co. and Walmart Inc., which signed up earlier this year. A separate UN sponsored initiative has gathered 786 businesses owning a combined $4 trillion in assets to reduce emissions in line of the Paris Agreement.

For its part, Endesa rejected the criticism it recieved over its advertising campaign. A company official says the utility will shut all coal-production and become carbon neutral by 2022. It also has announced plans to invest 4 billion euros ($4.4 billion) from 2019 to 2022 in renewable energy.

And yet, while industry is stepping forward with new goals to clean up emissions, it’s taking more flack from pressure groups wanting more. Greta Thunberg, the teenage activist behind a global wave of student strikes, drew attention to the issue at the COP25 meeting on Wednesday.

“The biggest danger is not inaction,” Thunberg told delegates. “The real danger is when politicians and CEOs are making it look like real action is happening when in fact almost nothing is being done apart from clever accounting and creative PR.”

Companies are acting at at a time when political leadership on the environment has wobbled in many nations. Voters in the U.S. and Brazil have elected presidents who question the need for action. In the European Union, Poland leads Eastern European nations raising concerns about the “net zero” pledge suggested by the bloc’s leaders.

“The real economy was not there in Paris, and that has changed over the last five years,” said Laurence Tubiana, the French climate ambassador at the 2015 meeting that sealed the Paris accord. “What we lack now is a political leadership, which the EU has to produce.”

Greenwashing Concerns Soar as Companies Vow to Clean Emissions

Mobilization in the private sector is recent and commitments made now might take years to materialize, said Nigel Topping, CEO of We Mean Business. 

“Five years ago, people thought it was crazy for a company to say they would be 100% renewable, and even crazier to say they would commit to reduce emissions in line with 1.5 degrees,” Topping said. “If we don’t reduce emissions we’re economically screwed, and the economics are in place now to reduce.”

Mahindra Group is watching out for eye-catching announcements that may not be backed by actions as it screens companies to invest in. The Indian conglomerate has stakes in businesses looking to solve issues related to climate change, including electric car makers or companies that turn food waste into natural gas.

“Some companies say they are carbon neutral today, but then I’m sure it’s not because their carbon emissions have come down but because they’ve possibly figured out a way to offset,” said Anirban Ghosh, chief sustainability officer at Mahindra Group. “That doesn’t solve the climate problem entirely. If you don’t work to bring down emissions, I don’t think we’ll win the war.”

Part of the problem is the lack of a mechanism to monitor pledges and hold companies accountable, said Morgan from Greenpeace.

Greenwashing Concerns Soar as Companies Vow to Clean Emissions

“Until these companies are proactively engaging to change laws in their countries to go to zero emissions, these commitments are not very relevant,” she said.

But the public and even governments are increasingly aware of the role companies are playing in fighting climate change, or contributing to it. The Commission on Human Rights of the Philippines ruled on Dec. 9 that 47 companies, including Shell, ExxonMobil Corp., Chevron Corp., BP and Total SA, could be found liable for harm caused by climate change.

At the UN talks, Shell’s vice president of new energies, Duncan van Bergen, was met by dozens of young activists from Fridays for Future. They had painted large eyes on the palms of their hands and had one slogan: “We are watching.”

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