Ivalua finds 53% of organisations concerned they are at risk of unintentional greenwashing

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New research from Ivalua has found that more than half (53%) of organisations are concerned that they could be at risk of unintentional greenwashing. With pressures from customers and regulators on the rise, the spotlight is on organisations to ensure all green claims are legitimate.

The study reveals that less than half (44%) of organisations claim they are “very confident” that they can “accurately” report on Scope 3 emissions. While nearly two-thirds (61%) say reporting on Scope 3 emissions feels like a ‘best-guess’ measurement.

With the UK government considering the inclusion of Scope 3 emission disclosure within the Streamlined Energy and Carbon Reporting (SECR) framework, it’s imperative organisations manage Scope 3 reporting proactively. Over time, organisations must substantiate green claims with verifiable data rather than relying on best guesses.

The research also shows nearly two-thirds of organisations agree that the cost of not taking action will far outweigh the cost of implementing green initiatives. But while 87% of organisations are confident they’re on track to meet net zero targets, many don’t have comprehensive, fully implemented plans in place for:

  • Adopting renewable energy (77%)
  • Reducing carbon emissions (73%)
  • Adopting circular economy principles (73%)
  • Reducing air pollution (71%)
  • Reducing water pollution (68%)

“Organisations are aware they must urgently address sustainability, and understand the cost consequences of not doing so. But this lack of confidence paints a negative picture,” comments Jarrod McAdoo, Director of Sustainable Procurement at Ivalua. “A lack of perceived progress could fuel accusations and fears of greenwashing, so it’s important to remember that obtaining Scope 3 data is part of the natural maturation process. Many sustainability programs are in their infancy, and organisations need to start somewhere. Estimated data can help determine climate impact and contribute to building realistic, actionable net zero plans. Over time, organisations will need to make significant progress on obtaining primary Scope 3 data and putting plans in place, or risk financial penalties as well as ruining reputations in the long run.”

“The findings demonstrate that to build trust and credibility in sustainability programmes, organisations need to find ways to best measure and gauge the impact of their Scope 3 emissions,” Oliver Hurrey, Founder & Chair, Scope 3 Peer Group. “But absolute accuracy could be hard to achieve without significant investment. Organisations shouldn’t spend time and money fixating on 100% accuracy. Instead, they need to equip procurement teams and the wider business with good data and insights. This will empower procurement teams to start taking action to identify unsustainable suppliers and ensure the business is headed in a greener direction.”

Working with suppliers will be critical in achieving net zero. The research found that over half (55%) of organisations agree that green initiatives to reach net zero goals that don’t involve suppliers are a waste of time. Ineffective supplier collaboration (26%) was also among the top challenges organisations must overcome, with other challenges including:

  • Other objectives being prioritised, such as cost and risk (27%)
  • Supplier resistance to reduce emissions (26%)
  • Supplier inability to assess emissions (25%)
  • Poor visibility into sub-tier suppliers (22%)
  • Incomplete, absent or unreliable data on sustainability (22%)

“Nearly two-thirds of organisations agree that an inability to measure supplier emissions accurately makes it hard to turn words into action”, concludes Jarrod. “There is a clear need to adopt a smarter approach to procurement. Organisations need granular visibility into their supply chains to ensure they can measure the environmental impact of suppliers, but also collaborate with suppliers to develop improvement plans. Only with this transparency can organisations showcase meaningful sustainability progress and avoid accusations of greenwashing.”