Greenwashing — the deceptive practice of calling a product or service ‘environmentally friendly’ without proof — has come under increased scrutiny. The European Commission found last year that ca. 42% of all environmental claims were “exaggerated, false or deceptive and could qualify as unfair commercial practices under EU rules.”
As governments and consumers call for more sustainable business practices, greenwashing stalls progress by muddying the waters. Consumers may be happy to hear that their utility company is now providing 50% more renewable energy, but the claim may only mean they moved from 2% to 3%. Words without actions make people sceptical about environmental actions in general.
If some companies are misrepresenting their green credentials and getting away with it, maybe they’re all at it?
How green was my energy?
There are many ways to invest in renewable energy, but only a few ways to demonstrate sustainability.
Avoid being tarred with the greenwashing brush
No business wants to be accused of greenwashing its reputation. Once a company has been caught out, rebuilding trust and brand equity will be costly.
As 100% self-generation is impractical for most businesses, EACs and PPAs have become the most popular mechanisms for sourcing clean energy. Whether EACs continue to be perceived as credible proof of green energy credentials by the public remains to be seen.
Signed PPA capacity in 2020 climbed 18% to reach 23.7 GW compared to 20.1 GW in 2019 (Bloomberg).
Source: RE100 Annual Report 2020
Three ways you can go even further:
As greenwashing becomes more regulated in key markets and buyers become more informed, false and misleading claims about environmental impacts will become unacceptable. Taking steps now to ensure your company’s actions reflect a real, demonstrable commitment to sustainability is environmentally necessary and critical to long-term business success.
- Reach 100% renewable energy by blending an off-site PPA with your own generation and EACs, maximising impact and cost savings.
- For example, a business might source 30% of its power through a PPA generate 20% from on-site solar arrays, then offset the remaining 50% with an energy attribute certificate (EAC)
- Include supply chain net-zero targets in your CSR strategy. Encourage suppliers to procure renewable energy by inviting them to an aggregation consortium and run a tender on behalf of the group through Zeigo.
- Join clean energy campaigns like RE100 or the UN Race to Zero with ambitious targets and strive for total transparency in sustainable business practices.