Sep 03, 2021 | Liam McEvoy
As sustainability continues to dominate the boardroom agenda and business headlines in the run up to CoP 26, so too does the damaging practice of ‘greenwashing’. The impact of greenwashing on a business is a critical risk that still too many Board members are either unfamiliar with or simply don’t take seriously enough. Research completed by Quilter recently showed that greenwashing is a concern for 44% of ESG investors.
Organisations understand the importance of investing in their brands to build confidence with stakeholders including employees, customers, and the wider public. What they may not fully appreciate is that the damage caused by misleading people, whether intentionally or due to a lack of rigour in systems, is exponentially worse than doing nothing until they have the facts to hand. Making claims which can’t be substantiated and lead to accusations of greenwashing, will lead to that confidence being lost. It will also distract from any good, impactful work the company has been doing.
As Warren Buffet famously said, “it takes 20 years to build a reputation and 5 minutes to lose it”.
That 20 years can be reduced and the risks mitigated significantly by being transparent in the claims you make, however.
Therefore, as you race to develop your Net-Zero strategy in line with the Paris Agreement and ahead of the November climate summit in Glasgow, sustainability has got to become a strategic business focus, and not just a marketing exercise. It is vital to put in place robust processes that ensure transparency of performance and provide the data to show that you’re doing what you say you’re doing. Directors and business owners must be fully aware of the environmental and societal impact their company is actually having and ensure that their messaging is an accurate reflection of company performance.
The key to avoiding claims of greenwashing really comes down to the need to measure, monitor and report on performance. The data you gather must be reliable and provide an accurate reflection of company performance. Data doesn’t lie. It will tell you how your company is performing, shining a light on what is progressing well, and what needs more focus. Take a more data-driven approach to your sustainability strategy and let the intelligence it provides inform your business. It is important that any marketing/messaging is reflective of performance and avoids over-claiming. This approach will allow you to start building confidence with stakeholders, manage the risk and encourage supporters to join you in your sustainability journey.
The importance of this approach and what we do at SustainIQ is the very reason why we’ve set Trust, Transparency and Togetherness as our three core values. Building trust is critical for any business, but can only be done with transparency in how you operate and by working together with stakeholders to share the highs and the lows. Who really trusts a person or organisation that claims to be brilliant ALL the time?
At SustainIQ we work together with our customers to ensure they have full transparency of their ESG performance. Our easy-to-use app makes it simple to capture performance data across their organisations. And our Integrated Reporting Dashboard allows them to drill down into the data, analyse and interrogate it, set baselines to measure progress and facilitate benchmarking. Ultimately, it helps them understand their performance and builds confidence that their investments are having a positive impact on the environment, society and their business.
Get in touch to find out how we can help increase transparency of sustainability performance for your business firstname.lastname@example.org.