Key Impact Points:
- Accountability Matters: Ensure your sustainability claims are substantiated with real progress.
- Holistic Tracking: Integrate promise management across all communication channels and reporting.
- Tech-Enabled Assurance: Utilize sensing technology to verify and monitor ESG claims effectively.
Greenwashing: Promising the Earth
The Challenge:
Organizations often set ambitious ESG goals and promote green products, but struggle to back these claims with real progress. The risk? Greenwashing.
The Reality:
Overstating ESG achievements without adequate substantiation can harm credibility. Leadership teams must balance their declarations with tangible progress, ensuring their promises are realistic and verifiable.
Daily Promises:
Beyond annual reports, organizations communicate sustainability goals through various channels:
- Ratings agencies
- Banks linking funding to sustainability
- Customers in product claims
- Staff and suppliers with net-zero targets
- Social media and public statements
Each of these promises adds up, and failing to meet them can lead to significant reputation damage.
Real-World Consequences:
Legal actions like Milieudefensie vs. Shell and cases against H&M and KLM show that stakeholders are increasingly holding companies accountable for unsubstantiated green claims.
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Ensuring Compliance:
Organizations need rigorous procedures for verifying ESG communications, akin to financial reporting standards. Effective promise management involves:
- Clear green communications strategy
- KPIs and governance structures
- Robust monitoring and sensing technology
“Having greater competence in ‘promise management’ will separate those leadership teams that live up to promises versus those that attract legal action or adverse media attention.”
The Way Ahead:
A transparent and accountable approach to green promises involves:
- Dedicated teams to manage and verify claims
- Sensing technology to monitor progress and detect discrepancies
- Leadership commitment to integrate and uphold promise management across all levels.
“Organisations must ensure they have an unambiguous green strategy that gives rise to communications that can be tracked and measured relative to achievements.”
By prioritizing accountability and leveraging technology, businesses can avoid the pitfalls of greenwashing and build trust with their stakeholders.
RELATED ARTICLE: EU Council Advances Green Claims Directive to Combat Greenwashing
