Today, corporate climate action claims can become reputational threats, rather than strategic positioning opportunities, unless they are carefully planned and communicated.
Companies are tripping over each other to prove their climate ambition to an increasingly more woke consumer-base – but also to a growing cohort of investors who want to know whether their investees can thrive in a warming world.
Countries are defining their national climate action targets and catapulting them into laws and regulations. Businesses operating in multiple countries need to understand and quantify the very real impacts of this evolution, and the long-term effects of the Paris Agreement.
All of this means that companies must become more savvy in communicating about their corporate climate action and making climate-related claims that resonate with and convince stakeholders but, most importantly, that show their progress as transparently as possible.
Our team believes that there are four key principles for companies to follow when pursuing best-in-class communications around climate claims, and to avoid accusations around greenwashing.
Avoid vagueness at all cost – i.e. committing to a claim without also communicating a clear definition of it. Credible climate action claims require transparency about the activities you are doing, and showing how those activities are part of a holistic, long-term climate strategy. Transparency on what goes behind a claim puts concrete plans under public scrutiny, and pushes your corporate sustainability teams to pursue the best possible solutions for reducing and balancing your organization's overall emissions.
Transparent communication, disclosure, and honest updates on progress (both the good and the not-so-good) are essential to uphold the integrity and accountability of any corporate climate action and related claims.
Show, don't tell. What real actions are you taking to substantiate your claim? Your audience needs to be convinced that you are really walking the walk. Sound operational evidence and verified impact data is an important way to provide that assurance. Dial up the stats that reflect your organization's sustainability priorities and that best resonate with your target audience.
Always align your communication strategy with your long-term sustainability strategy and your company's wider growth strategy. To hedge against changing terminology around corporate climate action claims, South Pole also encourages businesses to explore claims that are authentic to their brand, and that reflect their full suite of ambitious climate activities to reduce your carbon footprint.
Governments are increasingly responding to civil society demands for greater clarity around how organisations communicate climate action – particularly if such communication has the potential to mislead consumers and investors about the actions that organisations are taking (or not taking) to address their carbon footprint.
The Australian Government, for instance, has put forth clear guidelines on companies' environmental claims, as have the consumer watchdogs in the Netherlands and the UK. The French government has even passed legislation with strict requirements for when companies can claim 'carbon neutrality', for example.
More countries are likely to follow suit, mandating that companies transparently report how their climate action claims reflect emission reductions within and beyond their operations and value chains.
Companies need to build a robust foundation to make bold claims through ambitious, measurable, and time-bound climate action. Claims must stand on a holistic climate strategy that clearly shows what your company is doing to reduce its carbon footprint while helping to finance global climate change mitigation and adaptation efforts in parallel. It is important to note that your organization's efforts to decarbonize its own emissions will draw the most scrutiny from investors, consumers, and civil society – and even employees.
Furthermore, we now have clearer definitions for what 'outstanding' looks like, especially for the private sector.
For the ambitious target of corporate net zero emissions, for example, the Science-Based Targets initiative (SBTi) has published a clear standard against which it can (and will) evaluate businesses' net zero commitments and plans.
This is why embarking on a carefully planned, science-based climate journey – today – is so important:
The era of claiming ambition without clear disclosure is no longer possible – especially at a time when actions and words need to match the true scope and scale of our climate challenge. And when it comes to authentic and credible communications around climate claims, it will be about ultimate transparency, accountability, and impact: you must ensure that what you say is what you can actually achieve, be it around reaching net zero emissions or another bold climate action target.