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'Green silence' grows as companies keep climate plans out of scrutiny

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A new study has shown that a trend known as “green silence” is growing as companies increasingly choose not to publish details of their climate targets to avoid scrutiny and greenwashing claims.

Climate consulting and carbon offset developer South Pole said that a quarter of the 1,200 companies in the 12 countries surveyed will not announce science-based net-zero emissions targets, a roadmap to reduce emissions in line with the targets of the Paris agreement.

This was despite the proportion of respondents setting science-based goals, which more than tripled from the previous year to 72 percent.

After the COP26 climate summit in Glasgow last year, companies competed to announce their sustainability credentials. But the climate promises that followed led companies to claim their targets were unfounded or misleading.

While financial regulators took precautions against lax surveillance in ESG-branded mutual funds, lawsuits have since been filed over the greenwashing of advertising campaigns against oil companies such as TotalEnergies.

“There is now a high degree of scrutiny on anything related to articulating your sustainability,” said Michael Wilkins, head of Imperial College London’s Center for Climate Finance and Investment. “With the ESG backlash, I think it scared a lot of companies.”

Companies are also aware that the integrity of the frameworks used to measure sustainability is being questioned. The Science-Based Targets initiative (SBTi), which has become the arbiter of corporate climate action, has faced complaints about its governance and potential conflicts of interest.

“To be accredited you have to pay for the initiative, which leads to the assumption that you are paying yourself to get a good score,” Wilkins said. “This can disrupt the company trying to pursue goals.”

SBTi charges companies $9,500 for evaluating climate targets.

Nina Seega, director of sustainable finance research at the Cambridge Institute for Sustainability Leadership, said companies may be implementing legitimate targets but may not disclose them due to climate change policies in their region.

In the US, the state of Texas passed legislation in 2021 attacking ESG’s investment to harm the fossil fuel industry on which it is economically based, and this year accused BlackRock and nine other financial groups of boycotting oil and gas.

“We know that climate and sustainability go hand in hand with profitability. However, if the inclusive discourse in their country is contrary to this, they may not want to anger customers or beneficiaries.”

Climate groups have long called for stronger disclosure requirements to drive competition between companies to increase their commitments.

Bethan Halls, sustainability consultant at the South Pole, said, by contrast, that green silence makes targets harder to review and can deter businesses from setting more ambitious targets.

“If green silencing becomes a trend, it will make it even harder to inspire some of the rest of the climate,” he said. “As long as companies are transparent about their progress and communicate it transparently, they can’t go wrong.”

Despite the caution reflected in the survey, the South Pole found that companies are setting net zero goals more than ever before, with more science-based goals and more ambitious timelines to support them.

“It’s great that we have more organizations identifying SBTs,” Seega said. “Maybe that’s a sign that climate is becoming mainstream, and they don’t feel the need to scream about it.”

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