Save Eco Destinations

By Philipp Mimkes Coordination gegen BAYER-Gefahren

By Hunter Richards

Greenwash (verb, \ˈgrēn-wȯsh\): to market a product or service by promoting a deceptive or misleading perception of environmental responsibility.

Companies have been launching major ad campaigns to show off green products and services, but many of their claims are questionable. Greenwashing is threatening the credibility of legitimate environmental marketing and turning would-be green consumers away from the hype.

So how can we know who’s telling the truth about supposedly green products and who’s just greenwashing?

We can increase transparency and put an end to greenwashing through carbon accounting. A new kind of software is a key component of the solution.

Scrutiny of green business campaigns is reminiscent of the demand to hold corporations accountable for their financial reporting. The U.S. is still a leader in financial accounting, but we need to develop the same infrastructure for environmental accounting to restore credibility.

Enterprise Carbon Accounting (ECA) software is becoming the foundation of this infrastructure, and the market is growing. ECA software enables companies to track and measure all the components of their carbon footprint and find opportunities to lower costs and reduce waste. It’s expanding the potential for corporate environmental transparency.

When the transition fully takes hold, greenwashers could disappear entirely.

For ECA software and environmental accounting adoption to get rid of greenwashers, we need action in five main categories:

• Clear government action on regulations
• Adoption of carbon accounting principles
• Expansion of Scope 3 emissions accounting
• Better green business incentives
• Demanding, informed consumers

Clear Government Action on Regulations

lncreased coverage of existing new policies and decisive action on new legislation could quickly boost the adoption of carbon accounting and ECA software. The Environmental Protection Agency’s (EPA) Mandatory Greenhouse Gas Reporting Rule, which requires businesses that emit 25,000 metric tons or more of greenhouse gases annually to disclose their emissions to the Agency, could be strengthened to include smaller businesses. Firm action on new legislation could also help encourage ECA software adoption and end greenwashing.

Adoption of Carbon Accounting Principles

Stricter requirements for disclosure of standardized corporate emissions information, now more feasible with the adoption of ECA software, would provide a precise way to examine a company’s environmental record. When such a measure exists and becomes widely used, one will only need to refer to these numbers to get an impression of a company’s overall environmental performance. It will be a lot more difficult to conceal corporate environmental impact during marketing campaigns.

Expansion of Scope 3 Emissions Accounting

Mandatory inclusion of suppliers’ emissions and other indirect emissions sources in company environmental reports (Scope 3) would prevent under-reporting of emissions; all emissions would be measured and reported without room for loopholes. Requiring Scope 3 measurement would also spread more adoption of general carbon accounting throughout the supply chain. When a business must account for Scope 3, it must ask its suppliers to track their carbon footprints; a chain reaction could quickly increase the number of companies with comprehensive carbon emissions reports.

Better Green Business Incentives

Using ECA software to identify eco-friendly savings opportunities can make it cheaper to truly go green, making it unnecessary for businesses to greenwash in the first place. Businesses often find that shrinking their carbon footprints and minimizing costs can go hand-in-hand. Government incentives can also encourage eco-friendly business practices. ECA software could alert users to new opportunities to take advantage of government incentives as more of these opportunities emerge, ensuring that green sincerity is in the best interests of businesses.

Demanding, Informed Consumers

Demanding the hard numbers from standardized carbon accounting reports, while boycotting the proven greenwashers, forces businesses with green marketing campaigns to prove their sincerity or risk failure. After all, fully informed consumers won’t be fooled. When standardized carbon accounting is required and ECA software is available, companies won’t have any more excuses to conceal their carbon footprint. The final blow to greenwashing will be dealt by informed, rational consumers.

Hunter Richards is the accounting market analyst for Software Advice, which reviews hospitality and travel accounting software along with other systems. To learn more about ECA software and greenwashing prevention, check out Software to Hold “Greenwashers” Accountable.