Spot the greenwashing

There are a lot of corporate climate pledges out there, and it’s easy to be cynical about them.

I get it. We’ve been fed so many unsubstantiated claims (for example, on airline carbon offsets) and so much outright disinformation (oil companies, I’m looking at you) that it would be easy to just dismiss them all.

Here’s why that would be bad, and what you should know about those big promises. It’s important because global business leaders will gather Sunday in Davos, Switzerland, for the annual World Economic Forum. It’s very likely that we’ll hear more climate promises.

First, let’s talk about greenwashing — a blanket term to describe false or unproven claims in a company’s environmental records. It’s a big problem. The New Climate Institute, a research organization based in Germany, recently looked at the climate plans of 25 big multinationals and gave most of them very low marks on actually reducing emissions. The group’s report said it’s “more difficult than ever” to distinguish between real climate leadership and dubious claims.

But, it’s very important to keep in mind that some companies are trying to do the right thing. CDP, a nonprofit group focused on corporate transparency, has identified more than 250 companies that it says are leading the way to a greener future. You can think of these businesses as trailblazers, and, if we fail to recognize their efforts, they’ll have less incentive to do the hard work of actually reducing greenhouse gas emissions.

The ground rules for corporate pledges are still being written. And regulators are increasingly focused on the issue. The United States Securities and Exchange Commission, for example, will meet on Wednesday to consider new rules that would standardize the way businesses disclose information about investments that claim to be green, sustainable or low-carbon.

In the meantime, here are some key points about what it takes for climate pledges to be credible. Keep them in mind the next time you read about a corporate announcement.