Companies fear unintentional greenwashing, study reveals

Unintentional greenwashing is a major concern for companies, primarily due to customer and regulatory pressures, according to research performed by Ivalua. The data indicates that 53% of organisations fear that they could be unwitting participants in greenwashing. This is particularly significant now that the UK government is considering making Scope 3 emissions disclosure part of their new regulations, thus making it indispensable for all eco-claims to hold true to prevent non-adherence.

A mere 44% of organisations are firmly confident that they can accurately report their Scope 3 emissions in their supply chains, according to Ivalua's study. Meanwhile, 61% feel that reporting on Scope 3 emissions appears to be a guesstimate rather than a factual measure. The low level of confidence paints an unflattering portrait for organisations and could possibly propel allegations and concerns about greenwashing.

UK government's potential inclusion of Scope 3 emissions disclosure within the Streamlined Energy and Carbon Reporting (SECR) framework could make it crucial for organisations to actively manage such reporting. Ivalua's research reveals that a majority of businesses recognise that the cost of inaction noticeably outweighs the cost of addressing sustainability and implementing green initiatives. Despite this, many organisations lack thorough and fully realised plans for adopting renewable energy, reducing carbon emissions, applying the principles of a circular economy, and cutting down on air and water pollution.

Jarrod McAdoo, Director of Sustainable Procurement at Ivalua, commented, "A lack of perceived progress could fuel accusations and fears of greenwashing, so it's important to remember that obtaining Scope 3 data is part of the natural maturation process. Estimated data can help determine climate impact and contribute to building realistic, actionable net zero plans."

Founder & Chair of the Scope 3 Peer Group, Oliver Hurrey, emphasised the need for organisations to best quantify their Scope 3 emission impacts, but also cautioned that absolute precision could be a challenge without meaningful investment.

According to the study, over half of organisations agree that green initiatives that do not involve their suppliers are futile. However, there are significant challenges to be overcome, such as prioritising other objectives like cost and risk, resistance or inability from suppliers to reduce or assess emissions, poor visibility into suppliers' practices, and unreliable sustainability data.

McAdoo concluded, "Nearly two-thirds of organisations agree that an inability to measure supplier emissions accurately makes it hard to turn words into action. There is a clear need to adopt a smarter approach to procurement... Only with this transparency can organisations showcase meaningful sustainability progress and avoid accusations of greenwashing."