5 greenwashing red flags to watch out for in the workplace

Do you know what to look out for when it comes to corporate greenwashing? WorkforClimate’s Laure Legros shares the key watchouts.

The WfC Editors
July 2, 2024
3 mins
greenwashing red flags

Big corporations are racing to make bold climate claims, but when it comes to net zero targets, the devil is the detail. Not sure whether your employer’s green pledges stack up? Here are five red flags to help you work out the difference between legitimate climate commitments and greenwashing.

#1 Making misleading “carbon neutral” claims

Many businesses claim to be carbon neutral on flimsy grounds. How? Often these claims rely on deeply flawed logic that companies can neutralise their emissions by purchasing offsets instead of, you know, actually reducing their carbon emissions. “A business simply cannot claim carbon neutrality if all they do is buy carbon offsets,” Laure Legros, WorkforClimate’s Head of Experience, says. It is also misleading for any company to promote a product, service, feature, or event as carbon neutral because, as Laure explains, “every product exists as part of a supply chain, which – in the broader economic system – isn’t carbon neutral.” 

It’s more than just reputation that is at risk for a business found to be making bogus net zero claims. Regulators are increasingly cracking down on misleading pledges. For example, in Europe it’s actually now illegal to promote a product as “carbon-neutral”. And in Australia the ACCC is examining these claims as potential greenwashing. 

Best practice: Companies must communicate transparently and with integrity on their carbon emissions/net zero strategies and stop promoting their products as carbon-neutral Other terms this applies to include: Climate neutral, CO2 neutral, carbon zero, climate positive (in most cases).

RELATED: Carbon neutral, net zero and zero emissions: what's the difference?

#2 Omitting scope 3 emissions 

This is a classic greenwashing tactic, but can unfortunately be much harder to pick up as it requires reading the fine print (and some knowledge of how emissions work). 

Carbon accounting categorises emissions into three scopes:

Scope 1: Emissions a company produces directly (e.g. burning fuel in fleet vehicles)

Scope 2: Emissions a company produces indirectly from purchasing energy  (e.g. electricity use in operations)

Scope 3: All the emissions a company is responsible for indirectly, up and down the value chain (e.g. From products it buys from a supplier or from its products once a consumer uses them)

RELATED: What’s the difference? Scope 1, 2 and 3 corporate emissions

This is where things get tricky. Lots of corporations set ambitious targets for their scope 1 and 2 emissions, as it’s usually easier to directly measure – and reduce – them. But (and this is a big BUT), most selectively pick only some scope 3 categories or omit scope 3 altogether. Why is this a problem? “Because this category usually represents the biggest chunk of their emissions impact,” says Laure.

Best practice: Companies must commit to reducing emissions along the entire value chain, not just their own operations.

#3 Setting “relative” rather than “absolute” targets

This was a popular manoeuvre 10 years ago, although less common now due to more stringent certification criteria. Here’s how it works: Reduction targets can be set in either “absolute terms” (decreasing emissions by a set quantity in a defined timeframe); or “relative terms” (intensity-based targets that measure emissions in relation to a physical or economic metric). 

Relative targets allow for businesses to factor in growth. For example, French fashion house Chanel declared they were going to reduce emissions by 40% per unit sold. See the problem? “While efficiency is always great progress,” says Laure, “if it’s cancelled out by growth, then emissions don’t decrease enough or sometimes even increase. The climate doesn’t really care about efficiency!”  

Best practice: Companies must commit to absolute emissions reductions along the value chain.

#4 Relying heavily on carbon offsets instead of emissions reductions

Hooboy, this is a big one. The carbon offset debate continues to rage, and for good reason. First, not all carbon offsets are created equal. Good offsets (permanent carbon removal) aren’t cheap, and cheap offsets (carbon avoidance) aren’t that good. With the carbon credit market booming, many companies are opting to buy the cheaper kind, casting doubt over the effectiveness of these schemes.

“Many high-profile corporations set net zero targets that rely heavily on carbon offsets and use them to claim emission reductions where there are none,” says Laure. For example, Qantas says that they commit to capping their net emissions at 2020 levels – so it’s not clear whether or not they intend on actually reducing emissions.

Best practice: Companies should focus on emissions reductions, AND contribute to the global goal of carbon neutrality by investing in high quality carbon removal projects, instead of using offsets as a way to compensate for their emissions.

#5 Setting a target with no plan (or not delivering on the plan)

It’s not enough to just talk the talk. When it comes to climate action, corporations love a good headline. But you can’t set a target without outlining exactly how you plan to get there. For example, Toyota has a 2050 carbon neutrality commitment but not a date for when they will transition out of internal combustion engines. 

Equally, it’s one thing to have a target and a plan, but it also needs to be delivered. Time and time again, big businesses outline ambitious climate goals while emissions continue to climb. Microsoft has one of the most ambitious plans out there, but they just reported a 30% increase in emissions. It doesn’t stack up!

Best practice: Companies must have a clear transition plan outlining how they intend to reach their emissions targets, and be accountable for progress against the plan.

Aiming for integrity 

Let’s be clear: We acknowledge how hard this is. These climate goals are usually the responsibility of under-resourced and overworked sustainability officers, who need to get things right to avoid the pitfalls of greenwashing and greenhushing. They are walking a tightrope between setting ambitious goals and navigating the challenges of delivering on them. And the reality is, very few companies have climate goals that are actually aligned with what the science says and what the climate issue requires. 

Ultimately getting it right boils down to integrity and transparency. That is, aiming for what’s actually required rather than merely being perceived as a leader of an industry. And from there, being totally transparent around both the issues and the successes. 

Want to learn more about how to take climate action in the workplace? Register now for the next WorkforClimate Academy.

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