United Nations Urges Companies to Stop Greenwashing

Fossil fuel companies continue expanding oil and gas developments despite their net-zero targets.

Attendees photograph one another outside the main entrance on the first day of the UNFCCC COP 27 climate conference on November 06, 2022 in Sharm El Sheikh, Egypt.

Sean Gallup / Getty Images

The United Nations this week launched a highly-anticipated report urging companies to stop issuing bogus net-zero targets that amount to greenwashing.

Cities, municipalities, financial institutions, and scores of companies have announced plans to slash their emissions to zero, which, in principle, should help the fight against climate change.

“The problem is that the criteria and benchmarks for these net-zero commitments have varying levels of rigor and loopholes wide enough to drive a diesel truck through,” said U.N. Secretary-General António Guterres during the launch of the report at the COP27 climate change conference in Egypt.

“We must have zero tolerance for net-zero greenwashing,” he added.

What Is Greenwashing?

Greenwashing is a term used to describe situations where companies mislead consumers by claiming to be eco-friendly or sustainable as a marketing scheme rather than as a core principle of their business model. Often, these industries spend more money making themselves appear sustainable than they do implementing actual sustainable measures into their company.

Many net-zero plans contain far-away or vague targets and often call for the use of unproved technologies like carbon capture, as well as carbon offsets and tree planting, which effectively allow companies to continue polluting the atmosphere. Studies show that most of these net-zero plans will do little to stop temperatures from rising.

For example, many oil majors including Shell, ConocoPhillips, and Equinor have announced plans to reduce emissions from their operations to zero by 2050 that do not take into account the carbon emitted by the fossil fuels they sell, which would allow them to increase production. Furthermore, they have not announced plans to leave fossil fuel reserves on the ground or cancel so-called “carbon bombs.” 

Far from decreasing, fossil fuel production is going strong, especially in the U.S., where crude oil and natural gas exports have reached new highs in recent weeks, allowing oil majors to cash in record profits. Moreover, the Biden administration has urged fossil companies to further boost production and refining activity in recent weeks.

Cut Emissions, No Corners

To close these net-zero loopholes, the U.N. this week released a report that includes 10 recommendations to ensure that companies, cities, regions, and other non-state actors issue “credible, accountable net-zero pledges.”

The report says that net-zero pledges should aim to prevent the global average temperature from rising above the 1.5 degrees Celsius (2.7 degrees Fahrenheit) threshold, meaning they need to include interim targets every five years to reach net zero by 2050, such as a 50% cut in emissions by 2030. These plans cannot rely on cheap carbon credits “that often lack integrity instead of immediately cutting their own emissions,” Guterres said.

The U.N. chief had some harsh words for the fossil fuel sector. “Let’s tell it like it is. Using bogus ‘net-zero’ pledges to cover up massive fossil fuel expansion is reprehensible. It is rank deception. This toxic cover-up could push our world over the climate cliff. The sham must end,” he said.

Financial institutions need to slash emissions from all their investments, not just their operations, and businesses need to bring down the carbon footprint of their supply chain, as well as their own. Cities and regions must issue targets that account for the totality of their territorial emissions, the report says. 

Companies need to align capital expenditures with net zero targets, link executive compensation to emission reductions, stop investing in destructive activities like forestation, and issue targets that include “scope 3” emissions – those caused by the use of their products.

“Only 1/3 of publicly traded businesses have committed to net-zero, even fewer private state-owned entities. Commitments that do exist are poor quality with little accountability. The solution: way more transparency and public reporting, including a public dashboard,” tweeted activist Catherine Abreu, the Founder and Executive Director of Destination Zero.

The report’s lead author, Catherine McKenna, urged entities to release new net-zero targets within a year—research shows that most companies, cities, and regions have yet to release net-zero plans. The updated targets must contain concrete actionable details and reveal all lobbying activity because fossil fuel companies have spent billions in lobbying efforts to derail climate legislation.

Climate writer Michael Thomas recently revealed that despite Amazon’s purported plans to reach net zero by 2040, the e-commerce mogul donated $138,000 to 25 climate deniers ahead of the midterm elections.