Understanding greenwashing and how to avoid it

The Business Revolution Episode 2

In the second episode of The Business Revolution, Belinda Noble from Comms Declare discusses the concept of greenwashing and how to avoid it. 

Audio version:

In our first episodes of this podcast, we identify and circle around the basic values on which a business revolution must be founded. A primary one is simply telling the truth, and talking about it openly. In Episode 1, we explore what the issue is with the carbon emissions and the climate emergency, which is often a taboo that can’t be mentioned at business meetings. In Episode 2, we dig deeper into what it looks like when companies are not telling the truth.

Comms Declare aims to get advertising agencies to declare a climate emergency and drive climate action. They work against greenwashing, lobby for stronger laws, and engage in PR and lobbying activities. 

“Half of green claims are not substantiated, and regulators have started cracking down on this kind of greenwashing,” Belinda tells us. She emphasises the importance of honesty and transparency in sustainability claims and advises businesses to only make claims they can back up.

Belinda also highlights the need for stronger legislation to drive decarbonisation in the business community.

Transcript below.


Companies lagging behind net zero best practices

Can net zero commitments be trusted?

Future Super wrote in their newsletter on 18 April 2024:

Companies across all industries are racing to commit to net zero too. In fact, by some estimates, these voluntary net zero pledges from companies actually cover about 90% of the economy. 

If you’re anything like us, you’re probably wondering… can net zero commitments really be trusted? 🤔

Well, according to new research from the University of Technology, Sydney’s Institute for Sustainable Futures, maybe not. 

The research looked at 10 of Australia’s largest companies – AGL, Origin Energy, South32, Bluescope Steel, Cleanaway, Telstra, Qantas, Woolworths, Coles and Rio Tinto – all of them with net zero commitments. 

The companies were measured against international recommended best practices on net zero, developed by the United Nations. 

Unfortunately, the research found all 10 companies to be lagging behind net zero best practices. It also found their net zero pledges “largely lack scientific rigour”.

None of the companies have fully publicly committed to ending their use of fossil fuels or fully phasing out fossil fuels from their operations. And only 3 companies of the 10 – Woolworths, Coles and Telstra – were found to have science-aligned emissions reduction targets.

How it affects you🙄
“You’re telling me I can’t trust big business? Groundbreaking.”
It’s fair enough if you feel that way!

The thing is, business needs to be part of the solution to climate change. So some net zero commitments not stacking up is a really big issue. If we don’t take notice of this kind of research, then no one will be pressuring these companies to do better. 

And, according to some different research from Bain & Co, executives at energy and natural resource companies appear to be waning in their commitment to net zero by 2050 all together. Bain & Co found 62% of executives in that sector now anticipate the world will reach net zero by 2060 or later. When asked the same question last year, only 54% expressed the same pessimism.

Climate change isn’t an issue that we have the luxury of time to deal with. Limiting warming to 1.5 degrees requires global emissions to peak before next year, and to start going down after that. 

That’s why, as an investor, Future Super doesn’t take net zero commitments at face value. Many of the fossil fuel companies we exclude from our portfolios have net zero commitments. 

We believe we need to hold companies to meaningful action and not just nice words. This higher standard helps us to invest in real climate change solutions, like renewable energy.


→ United Nations – 3 December 2023:
Secretary-General’s remarks to roundtable on report of High-Level Expert Group on Net Zero [as delivered]

→ The Economist | Business | Wake up, boss! – 10 November 2022:
The UN takes on corporate greenwashing
“Will companies—and governments—listen?”

→ The Guardian – 9 November 2022:
UN experts demand crackdown on greenwashing of net zero pledges
“High level group releases report at COP27 saying policies should be ‘about cutting emissions, not corners’. The UN group set up to crack down on the greenwashing of net zero pledges by industry and government has called for “red lines” to stop support for new fossil fuel exploration and overuse of carbon offsets.”

→ The Age – 27 April 2024:
Green petrol and eco plastic? Fake ‘Earth friendly’ claims are out of control
“The use of vague environmental claims that confuse consumers, such as “eco” or “green”, is being banned in the EU. Australia should do the same.”

Report: In 2022, the Australia Institute published a report called ‘State-sponsored Greenwash’ exposing the deliberate policy mechanisms that have led to fossil fuel companies in Australia being able to claim they are climate leaders.


→ BBC – 11 November 2021:
What is greenwashing and how can you spot it?
“As climate change has become a big topic around the world, shops and businesses want to show us that they think about it too.”

Calls on Microsoft to stop greenwashing

Microsoft, the most valuable public company in the world, is being accused of greenwashing.

On a petition page, Stand.earth writes:

“Back in 2020, the tech giant made a commitment to reduce its emissions to carbon negative by 2030. And yet, Microsoft’s emissions have actually increased by 43%. This is the type of corporate tomfoolery we have no time or patience for. We are calling on Microsoft to commit to reducing its emissions, especially in its supply chain. Will you join us?”

Transcript – The Business Revolution Episode 2

Mik Aidt:
The Business Revolution is rolling. Once again, we’re with you here, The Business Revolution team is ready. And that’s: Mik Aidt – that’s my name – and then there’s Alan and Cherry. And how are you feeling? 

Cherry Ward:
Hi, Mik! I am feeling very optimistic about where we’re going in this space, not just with our podcast, but in the whole sustainability ESG space.

Alan Taylor:
Hi, I’m Alan, thanks Mik. This is great. I’m excited too, because we are sharing what can be done, and you’re listening, and we will get more traction as we go along. We’re going to get there, and we’re all going to do this together, and it’s exciting times.

However, as we did in the first episode where we did take a serious look at the situation with the climate, we’re going to take another, a little bit more serious approach to things… and we will get to the positive stuff. Isn’t that true? We still need to have a few things settled, like creating a foundation of where we’re coming from and what we want to talk about, and today we’ll be talking about greenwashing. Someone who knows about that is Belinda Noble from Comms Declare. Comms Declare is a group that set a goal of getting the agencies in the advertising world to declare a climate emergency. And they’ve had success with that, and lots of things happening. But let’s hear how Belinda describe… how she understands this concept of greenwashing, what it is, but also how we can avoid it.

Belinda Noble:
Comms Declare started after the Black Summer Bushfires. I really just sort of looked at what I could possibly do as someone who’d worked in media and comms about the climate crisis. And my sphere of influence was pretty small. So we thought, OK, we’ll just stick with what we know. And we now represent hundreds of marketing and communications professionals who want their industry to drive climate action and not to help big polluters. So over the last four years, we’ve worked against greenwashing. We’ve lobbied for stronger laws against greenwashing, and also more recently for policy change to reduce the amount of influence of the fossil fuel industries.

So that sounds amazing, more than a hundred different organisations backing you up on that mission.

Yeah, well, our members declare that they won’t promote the growth of fossil fuels, any spin or misinformation around climate science or high emissions products as business as usual. One of the many such similar groups representing different parts of the economy. So there’s Teachers Declare, Architects Declare, as I’m sure you’re aware, there’s health groups, vets groups, you name it. So, yeah, we are working with the industry to be part of this huge transformation. 

And what can you do then? What can you do to push your agenda forward? 

Okay, well… We cause, I would say, uncomfortableness amongst people that are promoting climate pollution. So, obviously, do, you know, my background in PR – we do PR against companies that have fossil fuel sponsors for example, or organisations that have fossil fuel sponsors. We write complaints to Ad Standards and other regulators regarding what we consider to be greenwashing. And then there’s just straight up lobbying of politicians and organisations to strengthen their laws.

I love the idea of making them feel uncomfortable. I’d love to know a little bit more about how they react when you’re pushing them on that one and actually demonstrating that uncomfortableness.

Yeah, interesting. Because we are, I think, one of the first movers in this space and deliberately calling out people that work with fossil fuel clients in particular, or fossil fuel sponsors, it’s been an interesting response. I’ve been told sort of confidentially from people that it’s just basic fear. People are just like, “Oh no, this is wrong now? Damn it! We thought we’d got it. We’ve got all these other things, you know, we’ve just sort of dealt with sexism and all this sort of stuff. And now we’ve got to deal with this as well?” So, yeah, I think a bit of fear and unease. In terms of our own, I guess, you know, my own interactions with people, there’s not a lot of one-on-one.

For example, we publish the F list every year, which is the agencies that have fossil fuel clients, and then one of the agencies that was on that list turned up with an article in The Australian having a crack at us. So it’s more like that.

Having said that, we do email all of the people on that F list, and say, look, have we got it right? Have we got it wrong? Do you have anything to say or whatever? And some people go, “Oh no, that’s wrong, please take me off.” And then we do, others just get super, super angry and threaten to sue. So, there’s that as well.

That’s, yeah, it’s extreme reactions, isn’t it, from organisations. Are you also finding that consumers are becoming a bit more savvy of brands in terms of if they’re greenwashing or not?

Yeah, so there’s a couple of really good bits of research about that here and overseas. Just really in the last two years or so, regulators have really started cracking down. So I think, you know, that the rough figure is that half of green claims are not substantiated. And I think it’s between 40 and 60 percent, depending on which country of people do not trust green claims which is not surprising considering it is mostly bogus. 

Yeah, wow!

So yeah, there’s a real issue with I guess market failure, right? You know, the market can’t work properly when people don’t know what they’re buying, don’t trust the claims on the box, so to speak. So it really needs to be changed. And I think, you know, it’s great that we’ve seen the ASIC and ACCC and AdStander start to sort of stop this really rampant and sort of shocking greenwashing that’s happening, particularly around net zero claims.

Yeah, wow! When you read out those stats, that’s really surprising. As a consumer who’s really conscious about my decisions – and I do read everything, you know, whether it’s clothing I’m buying – so now I probably have to do more research, dig a little bit deeper. But I think, yeah… I’m really shocked by that.

Yes, it’s not always bad actors as well. I think just as things develop, our knowledge develops as well. Like, I wouldn’t have thought a couple of years ago that carbon credits were going to be so discredited. Now, you know… I listened to a talk from Bill Hare, who’s a scientist, the other day, and he’s saying that our carbon credit system in Australia actually creates more carbon emissions, because it acts as an incentive to big polluters. So, you know, we’re all learning as well as we go along.

What do we do about that, Belinda? How do we create trust among ourselves in the business sector that when we say something, it’s true – and that we are honest, genuine people who really care?

Yeah, I think if you are an honest, general person that really cares, it’s actually more difficult in a way, because you don’t want to mislead. I guess I would say: Just don’t claim it if you can’t back it up, at the end of the day. And, you know, we’ve seen, you know, a lot of aspirational, possibly well-meaning – possibly not – targets coming from, you know, big polluters and others, and sustainability claims and circular economy claims and so forth. Everyone’s talking this talk, but not everyone is doing the work behind that. So I think if you’re not doing the work, then don’t make the claim.

Your knowledge of your own carbon emissions and your track to get to net zero should come before the ad. And I think that’s what we haven’t seen. Although… It’s very interesting, I think: Alinta Energy at the moment’s got their whole campaign saying, admitting, “We do use coal and gas now, but we hope to go to renewables.” So that’s quite interesting. I think that’s a reaction to the clampdown on greenwashing.

Hmm. Taking a bit of honesty into the way that we talk about this.

Yeah. So I think it’s a good step forward, for sure. But it’s interesting that they acknowledge, ‘Yeah, we’re still basically a coal company, but we don’t want to be.’ So that’s interesting. What I don’t know and haven’t checked is how they’re actually going about that. And if it’s rigorous enough for them to be making any claims.

Hmm. Belinda, speaking of rigorous, how far are we in your opinion on that journey towards full decarbonisation? That’s in a way what we talk about when we talk about the business revolution: It is very much about the carbon aspect of it. In your opinion, how well or how badly are we doing here in Australia at this time?

I think we’ve made an awful lot of progress just in the last two or three years. Certainly there’s progress in recognition that net zero and recycling and having a smaller footprint are positive things. But I really believe that it’s going to take stronger legislation and laws for the business community en masse to move.

And that’s being still treated with a lot of resistance, as we’ve seen in the car market at the moment, that have lobbied really strongly against the most basic emission standards.

So I think we’ve got a long way to go. It’s one of the most huge challenges that we’ll face, re-gearing the entire economy. So it’s not surprising. I just do hope that people keep going with it and don’t give up because we’re seeing that in some sectors as well. We’ve got to keep going.

I’m just wondering if there are thoughts coming to my mind as you mentioned companies like Alinta and the car companies and their pushback. I guess for me it’s an interesting line between greenwashing and saying, ‘Hey, we are doing something, we’re trying to go there, but we haven’t done anything yet.’ And obviously if the intent is genuine, I can sort of see why a company can do that. I mean, the petrol companies, if they were walking the talk and moving, then you can argue that they are fair enough. That’s what they started at – their starting position. But when you’ve got companies like Alinta, and they’re as far as last time I looked at, but it’s a while ago, they had no particular plans on their scope three emissions. Where do we feel that that line is drawn between greenwashing and being honest about where their intentions are?

Well, I think if you’re honest, you’re not greenwashing, right? And then the intentions are, I guess, the fuzzy bit. I always go back to the UN Special…, I’m not going to get their name right, but there’s a special group conveyed by the UN Secretary-General on greenwashing, and they came out with an excellent report on how to make net zero claims from non-state entities. It’s got a really complex nasty name, and that has, you know: Basically you can’t make, you shouldn’t make a green claim that’s only based on carbon offsets for example. You shouldn’t make a net zero claim if you’re in a high polluting business like coal or gas, and you shouldn’t be making a net zero claim unless you’ve got a fully budgeted, accountable, often updated plan to reach net zero by 2050 or, you know, be in line with the Paris Agreement. So I think that’s the basic sort of barriers around net zero claims.

Thank you very much, Belinda. And I think we fully agree with you on your analysis of where we’re at and what needs to happen. What’s your advice to our listeners? And our listeners could be both employees or it could be CEOs, both in terms of: Could they become part of Comms Declare, the network that you have and what would happen if they became a part of it and how do they do it and stuff? And also if you have some general advice just on where we go from here?

Yes, please. If you work in the marketing or communications industries, please go to commsdeclare.org and sign up. We also have a campaign called FossilAdBan Campaign, which is aiming for legislative restrictions on advertising by polluting industries.

So we’re asking people to write to their local MP or the federal government via fossiladban.org to ask for those restrictions. Or show support for them. In terms of, I guess I’d hate to advise any business owner, since I don’t run a business, but I guess, you know, I just say: This is a big change. This is a big change operation. It’s not a comms operation. It’s not just a comms operation. It’s a change management operation. And therefore, I believe you’ve got to have a vision, you’ve got to have urgency, and you’ve got to bring people along with you. And that’s the same, I guess, if you’re doing communications or if you’re government or business: you’ve got to look at that sort of framework as well.

Cherry, Alan, what’s your take on everything here that we’ve talked about with Belinda Noble? 

It gives you a feel for thought about how organisations can be honest and actually share the truth in what they’re doing. But at the same time: balance! I guess is going to be quite a scary thing for some organisations to balance between greenwashing and greenhushing because they’ve got to find that way of being honest. “Yes, we’re doing this, but we’re not solving that problem.” And I quite liked one of the points that Belinda raised around how to manage that, and that’s through actually giving truthful statements. Only say you’re net zero if you’re net zero. Only say you’ve got a strategy if it is comprehensive. And then even if you’re at the beginning of the journey, theoretically, it should be fine to be able to say, “Yep, we are not the best. But we have got our plan, we are going to do it and we are, you know, we’ve got the wheels in motion and then managing that.” But I think that’s still going to be a bit of a PR exercise because some people will probably try to derail them even when they’re doing the right thing.

Yeah, I think it’s a combination of transparency and sharing the truth as well. I think it’s okay to be aspirational and say this is what we want to achieve, but then be truthful about where we are. From a psychology and neuroscience perspective, you can build trust with your consumers or with your stakeholders when you are more transparent. So think about Uber, the Uber app that you’ve got, it tells you how long the car is going to take and they did some research and they took it further and actually showed the progress of the little car if you’ve ever used an Uber app. So I think, you know, what organisations can do is say, “Look, this is, we’re not there yet, but this is where we are. Here’s what we’re doing.” And actually show their progress along the way so that it builds trust with, you know, with the consumers and stakeholders.

And there is a very positive side benefit from that, isn’t there, which is the atmosphere that it creates within the organisations, among the employees. When there’s full transparency and this is something that it’s sort of openly talked about at meetings or even in the canteen and so on, then that becomes something that people can even get a bit excited about – that they’re part of an organisation which is like that, which has those values of honesty.

And building on that, you mentioned the insight and all, but that’s also a massive PR opportunity as well, because building that trust, as Cherry said, with the consumers, building that internally, this is when it becomes a self-fulfilling sort of prophecy. It becomes reinforcing. And when they share, they can use that in their advertising, they can use that in a positive way, we are there, we are doing this, and this can be a market differentiator.

We promised in our episodes that we will be asking you to ponder and reflect on these topics that we discuss. So in light of our discussion with Belinda on greenwashing, for our CEOs and business leaders, our question for you is: What concrete steps will you take to ensure that your company’s ESG or sustainability strategies are authentic and impactful?

That’s a brilliant question to put out there, and I’m going to add to that and say, what are the big hairy audacious goals that you can put in there? Don’t be afraid of them. That’s what got man on the moon after all. 

Yeah, and this podcast, after all, is The Business Revolution. Don’t be afraid of creating a revolution, certainly the kind that we’re talking about, which is a very peaceful revolution, but it’s a bold and courageous one because nothing is going to happen in the speed that we need to see unless people are ready to step up and, like you said, you know, move faster on these things and be very open and transparent about it – and honest.

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The Business Revolution
The Business Revolution
Cherry, Alan and Mik

Podcast hosts Cherry, Alan and Mik are three consultants working independently in this field of transformation in Australia. In a series of interviews and segments they ask some of Australia’s leading experts, decision makers, sustainability officers, carbon accountants and employees how we make it happen - how we turn what is still just an idea, a mindset, into a genuine, serious and deep revolution and reinvention of how we do things in business.