Is your communication on climate action up to scratch?

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.

Words are free – it's how you use them that may cost you

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.

1. Transparency

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.

2. Accountability

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.

3. Impact

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.

4. Authenticity

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 and market authorities are watching

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.

You must build a foundation for claims through measurable, time-bound climate action

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:

1. Measure: Find out how big your carbon footprint really is - from facilities, energy consumption, products, services, investment portfolio – and understand your possible climate change risks.
2. Set ambitious targets: Develop your sustainability strategies and targets. Find out what your short and long-term emission reduction targets would look like when aligned to the latest climate science. If you are pursuing science-based emission reduction targets (SBTs) to reach net zero, the SBTi has clear requirements for what these targets should look like, both in the short-and long-term. The Institutional Investors Group on Climate Change also has set out a framework for how financial institutions can allocate their portfolio to meet Paris Climate targets.
3. Plan emission reductions: Identify the most impactful short and long-term interventions that can reduce your carbon footprint to meet your target. Ideally, you should plan a trajectory to reduce emissions across your entire value chain, across all of your direct and indirect emission (scopes 1-3). You should set a net zero emissions target year based on science, with interim milestones on how to get there, all consistent with a 1.5ºC climate mitigation pathway.
4. Finance global climate action – ideally within your sector: For the emissions that you simply cannot address in the here and now, you must compensate for its impact on the atmosphere by financing emission reductions elsewhere. You can support faster climate action beyond your own value chain and help close the global emissions gap by financing projects and activities that have a measurable, verifiable impact in reducing, avoiding or even removing emissions. True leaders will focus on projects that contribute to driving down emissions within their own sector, using their own ambition to pull along those who are less ambitious or who are just starting out. 'Crowd sourcing' finance towards expensive solutions within your sector can bring down their costs, so that you and your peers can eventually use these solutions to reduce your own footprint.
5. Communicate and lead: By publicly disclosing points 1 to 4, you are matching words with deeds, safeguarding reputation, and building the foundation for authentic brand activation campaigns or investor reporting that resonate with your key stakeholders. This is your opportunity to engage with your clients, suppliers, and investors to bring them along on your climate journey.

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.