Outside of pre-COP events in Milan, Italy, activists rallied to demand urgent action on climate change. Photo credit: Mauro Ujetto

Beware the greenwasher: 5 steps towards genuine corporate climate action

By Alex Maitland, Senior Private Sector Advisor and Lies Craeynest, Head of Private Sector Engagement, Oxfam

As we head into COP26 in Glasgow, we hope to see corporate climate commitments grounded in real actions that cut emissions sharply and rapidly by the end of this decade and support a just and resilient transition.

This year’s COP 26 is an opportunity for companies to brandish their green credentials. Expect net-zero pledges, plastic free product lines and roadmaps galore.

We certainly need it, action by the private sector is essential to avert the worst impacts of climate change. If you’re still not convinced about the urgency of the crisis, just look out of the window. But the poorest and most vulnerable communities, those who have done the least to contribute to the problem, are bearing the brunt of impacts from record shattering floods, heatwaves, and droughts.

As fast as companies will put out press releases and glossy adverts at this year’s COP, activists will be standing by to challenge empty promises.

Beware the greenwasher.

Before we’re all swept up in admiration by this sudden corporate greening, here are five elements that we think a climate plan needs for rhetoric to match reality.

  1. Disclosure

Climate disclosure is the bedrock of ambitious action. Publish your scope 1-3 GHG emissions across your operations and supply chains and report on progress towards targets. The framework for doing this is already out there, so follow the Task Force on Climate-related Financial Disclosure (TCFD) recommendations.

It’s essential that your supply chain is transparent and traceable, especially for companies that have supply chains with significant environmental and human rights impacts, such as palm oil.

  1. Ambition and Targets

Set ambitious, science based, targets with a clearly defined path to reduce emissions in line with the Paris Agreement. That means deep emission reductions in your operations and value chains. Global emissions must be halved by 2030 to keep warming below 1.5 degrees and avoid catastrophic climate breakdown. This goes for investments by financial institutions as well. A forest of flimsy net zero targets won’t get us there.

Think about how incentives will help or hinder you – do governance and pay structures reflect overall climate objectives and break from purely maximising shareholder value? Put bluntly, if your company is missing its emissions targets, it shouldn’t be paying out bonuses or dividends.

  1. Plan for a just transition

In order to build a new economy that is equitable, thriving, and regenerative, your company must grab the chance to transition away from today’s extractive, carbon-intensive one, and do that fairly. Prepare for a just transition by developing plans that secure the future livelihoods of workers and affected communities.

This includes meaningful efforts to protect workers’ rights and livelihoods while investing in green job creation and reskilling and retraining workforce.

Recognise and address the company’s impact on inequality by paying a living wage, limiting CEO-worker pay ratios and paying fair share of taxes.

Most of all, base these plans on meaningful social dialogue and stakeholder engagement. A just transition can come with human rights risks that should not be ignored.

  1. Resilience and adaptation

Focus on the people in your business and supply chains who are at the frontline of climate change. Identify hotspots where human rights will be impacted by climate change and exert influence where you have leverage.

Do this in a transparent way and involve stakeholders by sharing information and developing a joint approach. This is not just about protecting your products from the impacts of climate change, but also the workers and farmers who have been producing or making them for many years.

So, set out a timebound plan and a budget that helps communities, especially the most vulnerable ones, address the impacts climate change.

  1. Advocacy

Voluntary commitments won’t be enough to tackle the climate crisis. Government’s must step up to make the goals of the Paris Agreements a reality. Governments listen to companies.

Get out of all those trade associations that lobby against climate policies. Work with like-minded peers and progressive sector groups to improve knowledge and practice. Call on governments to invest more in adaptation, particularly of most vulnerable groups.

Take another look at your company’s plan for tackling climate change. Does the rhetoric match these expectations?

If not, here’s our number one suggestion. Don’t hit send on that press release, don’t launch that glossy ad. Don’t risk becoming another meme on Facebook.

Instead, recognize the huge public, social and political power you hold, as much as your economic power.

You help to formulate the global processes that dictate how we all exist as consumers, workers and producers. You are as much a driver of global consumerism, and all the law and process and behaviour that underpin it, as you are driven by it.

Understand in a very fundamental way that the world will only succeed in staying within its boundaries of safety provided that you do the right thing.

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