LONDON, UNITED KINGDOM – 2021/09/01: Protesters carry a banner which says ‘Stop The Lies – Action Not Greenwash’ while marching during the demonstration outside Downing Street. Extinction Rebellion protesters staged a ‘greenwash’ protest in Westminster, part of their two-week Impossible Rebellion campaign calling on the UK Government to act meaningfully on the climate and ecological crisis. (Photo by Vuk Valcic/SOPA Images/LightRocket via Getty Images)

In a survey published in July, research analytics company GlobalData gauged the business community’s current sentiment towards emerging technologies across industries. The responses underlined the importance of sustainability, counterpointed by a perception that greenwashing is increasingly becoming an issue in this area.

GlobalData analysts assess that once the Covid-19 pandemic is under control, sustainability will be the top theme across all sectors to give business executives the most restless nights in the 2020s. Achieving environmental, social and governance (ESG) targets will be high on every CEO’s agenda.

With that in mind, since the first quarter of 2021, GlobalData has been asking business respondents to report on companies’ attitudes towards sustainability. The first of two sustainability questions asks if respondents’ companies have changed their behaviour to meet sustainability goals.

Only a minority of the people polled (17%) believed that most companies are sincerely committed to sustainability. Almost 60% of the GlobalData sample continued to hold a somewhat cynical view on sustainability commitments, believing them to be a ‘greenwashing’ marketing exercise in some or most cases.

Interestingly, 33% did not know if their company had taken action on sustainability. According to GlobalData, this might mean that either companies are not effectively communicating their ESG strategies or that the actual number of companies not taking action is bigger than the 28% who said their company was not changing its practices suggests.

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While the survey found that more companies are changing their behaviour than not (at 40%), greenwashing remains a hurdle to be overcome if the global economy is to reach net-zero greenhouse gas emissions by 2050.

According to many scientists, that date is essential to ward off the catastrophic effects of climate change. Net zero may also give businesses an impetus to turn greener: a report by the Universal Ecological Fund estimates that failure to reduce emissions will cause $2bn per day in economic losses by 2030 due to weather events exacerbated by human-induced climate change.

Recent analysis by reinsurance leader Swiss Re also found that an unchecked global temperature rise will reduce global economic output by between 11% and 14% by 2050, potentially cutting global economic output by a staggering figure of $23trn each year.

Turning net zero into a global reality will require higher investment in low-carbon technologies, carbon capture and storage technologies plus carbon offset projects. There will also needs to be serious investment in renewable energy sources. However, GlobalData’s polling results suggest greenwashing and company ineffectuality may be a major obstacle to effective action.

Greenwashing in Saudi Arabia and aviation

The term greenwashing came about as companies began making unsubstantiated or misleading claims about the environmental benefits of their products and practices.

Consumers that are constantly making an effort to use green and natural products to reduce their impact on the environment may be discouraged if they are misled by companies. GlobalData

An example is gas and petroleum giant Saudi Aramco, cited by GlobalData as a laggard in the climate change stakes. The company has played up its role in the Oil and Gas Climate Initiative (OGCI), which aims to reduce the carbon intensity of fossil fuel production, but the OGCI does not set absolute targets for emission reduction, leading to accusations of greenwashing.

The company has been “less than transparent in its emissions disclosures”, according to a report on ESG in the power sector. Saudi Aramco is one of the few oil and gas supermajors that does not disclose its Scope 3 emissions, which are those emitted by a company’s customers. A report from Bloomberg Green estimates that as much as 50% of Saudi Aramco’s emissions are undisclosed this way, equivalent to 57.9 million metric tonnes (t) in 2019.

The implications are worrying considering Saudi Aramco’s contribution to the ongoing climate crisis through oil production and refineries of jet fuel, diesel and more. In 2019, the Climate Accountability Institute found that the Dhahran-headquartered entity was the world’s largest emitter of CO2 between 1965 and 2017, contributing more than 59 billion metric tonnes in that time. This figure is 37% more than the second-largest emitter, the US’s Chevron.

Saudi Aramco’s silence may be damning, and its work in the OCGI not significant on the ESG front, but greenwashing goes beyond what businesses don't reveal while professing to be eco-friendly. It also applies to claims businesses make.

In a report on sustainability in travel and tourism, GlobalData cites the example of airline TUI. In its sustainability strategy, the British-German brand claims to be the only integrated tourism business to fly the Boeing 787 Dreamliner. The aircraft, introduced in 2007, is 20% more fuel-efficient than the Boeing 767 it replaces, and produces about 60% less noise pollution.

TUI stated that it operated eight 787 Dreamliner planes in 2015, and it would expand its fleet to 17 by 2019. However, according to the UK Civil Aircraft Register, it has 14 of this aircraft in its fleet as of the start of September 2021, 11 of which are in service, according to In contrast, TUI operates 31 of the 737–800 aircraft, all but one of which are currently in service. These models are significantly smaller, meaning an increase in flight frequency, which will be more harmful for the environment.

“Coming short on a claim of this magnitude could be seen as greenwashing,” states GlobalData. “Consumers that are constantly making an effort to use green and natural products to reduce their impact on the environment may be discouraged if they are misled by companies.

“If consumers lose trust in a service or product, they might start to feel that their efforts won’t make a difference, which may cause them to reduce their sustainable efforts.”

It is not all doom and green gloom

Examples such as these go some way to explaining why business insiders may have a cynical view of sustainability commitments, but that doesn’t mean all companies are guilty of greenwashing; indeed, some energy names are head and shoulders above the rest.

As renewables were the only energy source to experience increased demand in 2020, a trend likely to continue throughout the decade, those companies making efforts to decarbonise their generation will likely see benefits on the balance sheet too. GlobalData

GlobalData’s report on ESG in power points to Spain’s Iberdrola as a leader in the climate change theme. In fact, it is the only company in GlobalData’s power utilities scorecard to receive the highest thematic score of five for both the ESG and renewable energy themes.

The $83bn (€71.13bn) energy utility, which deals with power generation plants alongside transmission and distribution facilities, has made several leading commitments to reducing emissions, with approved science-based targets to reduce absolute Scope 1, 2 and 3 emissions by 45% by 2030, from a 2017 base year.

Scope 1 emissions refer to those directly made by a company, and Scope 2 to indirect ones such as the energy it uses that is produced on its behalf. From 2018 to 2019, the company reduced its Scope 1 emissions by 1.6% from 13.6t to 13.4t, its Scope 2 emissions by 18% from 2.54t to 2.08t and its Scope 3 emissions by 1.9% from 54.2t to 51.1t.

As of 2021, more than 75% of the company’s active installed generation capacity is emission-free, according to the GlobalData Power Plant database, with the company closing 17 coal and oil plants since 2001.

Iberdrola’s Smart Mobility Plan, meanwhile, seeks to deploy nearly 150,000 electric vehicle (EV) charging points by 2025. As more charging points are essential to get EVs off the ground, GlobalData believes this effort will “help on the path towards the decarbonisation of transport”.

To top it off, Iberdrola is also the world’s largest corporate issuer of green bonds, having issued more than $13.6bn-worth since 2014. Its subsidiary Scottish Power, meanwhile, became the first integrated energy company in the UK to generate 100% wind power.

These actions come with an associated upfront cost, the sort that can keep companies ineffectual and mired in the art of greenwashing, but GlobalData analysts remind energy stakeholders that going green doesn’t necessarily mean red ink in a company's accounts.

“Iberdrola’s push towards sustainability helped the company post an increase in net income in 2020, one of the few energy companies to do so,” GlobalData reports. “As renewables were the only energy source to experience increased demand in 2020, a trend likely to continue throughout the decade, those companies making efforts to decarbonise their generation will likely see benefits on the balance sheet too.”

Another leader cited by GlobalData as one improving its financials is US energy company NextEra. NextEra produces more electricity from wind and solar than any other company in the world, which got it onto Fortune’s 2019 list of the World’s Most Admired Companies, being ranked top in the electric and gas utility industry for the 12th time in 13 years.

“NextEra’s consistent recognition by third parties as a leader in good governance has helped drive shareholder value, with the company’s share price increasing 136% in the five years to June 2021, outperforming most of its US peers,” GlobalData analysts write.

Greenwashing and gold standards

If these exemplars don’t inspire businesses to stop greenwashing and start going properly green, then perhaps regulation will. Energy Monitor reported in August that the European Commission's proposed "gold standard" for the green bond market will address investor greenwashing concerns by assuring them of truly climate-friendly investments.

The commission is aiming for full transparency on bond proceeds via detailed reporting, and for all green bonds to be subject to external review to ensure compliance with EU taxonomy.

Despite registering a total market value of $1.1trn in 2020, the green bond market has no universal standard within the EU, something which the proposed European Green Bond Standard should resolve (although it will be voluntary). The bonds can be used to fund projects of up to ten years that are aligned with a new EU taxonomy for green investments.

The move is likely to go down well at COP26. The UN climate change conference is likely to bring more power to the net-zero movement, something which the energy sector should be conscious of when considering ESG.

Note on data: GlobalData ran six polls on its Verdict network of B2B websites, which had 49 million users in the period from 30 June 2020 to 1 July 2021. Poll participants are professionals from more than 30 industries. In total, the six polls received 2,341 responses distributed unequally between each of the polls.

This article is part of a special series GlobalData Media is publishing in the run-up to the next big UN climate conference, COP26, in Glasgow, from 1–12 November 2021. Our focus is on the opportunities and challenges for business of the transition to clean energy and net-zero greenhouse gas emissions. Other articles in this series include: