Greenwashing companies should be 'named and shamed' to help consumers choose

The UK’s goal to become a global climate leader in the transition to net zero is at risk as many companies have made little progress in adopting strong targets and participating in net-zero “greenwashing”, new research has found.

A report published today by the Institute of Public Policy Research (IPPR) said many companies’ claims of being “green” cannot be verified.

Luke Murphy, head of IPPR’s Fair Transition Unit, said: “We’ve got a national net-zero target for 2050 and central to that is making sure all businesses are also moving towards that with robust targets and plans. At the moment, there’s no information or ability for the general public or investors to scrutinise those targets and claims of being on the path to net zero.”

“We are getting to the point where consumers are making choices based on a company’s environmental credentials. But right now there’s no sound basis for people to make an assessment as to whether those claims are accurate,” Murphy told The Big Issue.

IPPR’s report actively calls for an end to this “greenwashing”, the term for when a company or brand suggests they are environmentally responsible but aren’t in practice.

High profile cases of greenwashing companies include Volkswagen, which was found to have installed software in its cars to cheat emissions tests, and fast fashion giant H&M, which has been accused of using eco-friendly messages in marketing at the same time as unsustainable manufacturing processes.

The IPPR report also calls for publishing the names of companies that fail to make, publish, and meet their transition targets. The “naming and shaming” would “impact on the trust in those companies making those claims”, Murphy said.

Murphy explained the UK might risk undermining its reputation of being a global climate leader if robust net-zero transition targets continue to be lacklustre. 

“There’s a huge economic benefit to be gained from the transition to net zero but the UK is only going to be able to reap those benefits if it has a credible and trusted regulatory framework in place.”

In addition to cracking down on greenwashing, IPPR is calling for “urgent reform” to ensure net-zero transition targets are consistent and achievable in the medium and long term.

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The report found just 739 large UK firms have signed up to setting targets that are considered “gold standard” by the government’s science-based targets initiative, which provides clearly defined objectives to reduce emissions and achieve net zero as part of the Transition Plan Taskforce, introduced by the Treasury in April 2022. 

According to the taskforce, all gold standard targets should include “high-level ambitions to manage and respond to climate change; short, medium and long-term actions to achieve those ambitions; and governance and mechanisms to underpin those actions”.

Out of the 739 firms signed up, only 363 are actively developing their targets, according to IPPR.

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“We want to see consistency in the targets and consistent timelines too. They should be based on the science-based targets initiative while also recognising there will be different approaches for different sectors as some will find it harder to decarbonise,” Murphy said.

IPPR is recommending the creation of a “robust government regulator” to ensure that progress is continually monitored.

Murphy and IPPR are “hopeful” that its recommendations will be thoroughly considered by the government as part of a “wider push on increasing climate ambition”, fuelled by US President Biden’s Inflation Reduction Act. 

“We’ll continue to work with other partners to ensure we can live up to that ambition of being a global leader in climate and trying to build public support and pressure from the government to achieve what we need for net zero,” Murphy added.

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