Weathering the “Sustainability Backlash” — Damned if you do, damned if you don’t

We seem to have reached the “damned if you do, damned if you don’t” era of corporate environmental sustainability. Companies across the board are being accused of greenwashing or greenhushing, doing nothing or doing the wrong thing, under-reporting or telling fairy tales and – these two blow my mind – changing goals based on evidence or reporting risks that might prevent goals from being reached. 

Let’s start with the weirdest 

This past July, FedEx filed their 10-K with the SEC as they always do. They listed risk factors, as they always do. One of the risks listed in the 10-K was that the company “may be unable to achieve or demonstrate progress on our goal of carbon neutrality for our global operations by calendar 2040.” The filing went on to state that the achievement of the goal depended on a variety of uncertainties. So far, a seemingly normal filing.  

But enter a “thought leader” with 22k followers on LinkedIn (which is not an insignificant number in this community of practice) confidently declared that FedEx was walking away from its climate commitments. Many commented and pointed out the purpose of the risks section in the 10-K and the danger of extrapolation. Other risks listed included the risk of changes to labor laws, the risk of competition and the risk of reputational harm. This section of the 10-K always reminds me of “Fears of Your Life,” an engaging piece of radio from This American Life in 2020 where Michael Bernard Loggins names his fears to better address them, just as FedEx was doing — but was being damned for doing it. 

Transparency under threat  

In a similar vein, in August, Finnish forestry company Stora Enso reported an operational incident that resulted in damage to 200 meters of riverbed containing endangered freshwater pearl mussels from machinery crossing the river. Stora Enso immediately suspended forestry operations in all areas of the country under water, forest or nature regulations while they investigated the event and developed protocols to prevent anything similar happening in the future. The transparency was rewarded by WWF Finland calling a “time out” on their work with Stora Enso, and “seriously considering their conditions for continued cooperation.” Investors interviewed about the incident reluctantly gave Stora Enso kudos for being open about the issue but still placed them on watch lists. How will this “damned if you do” reaction from a trusted NGO partner impact transparency on such issues in the future?  

Transparency is also under threat in the world of targets where companies are trying to balance climate ambitions with practical realities like sourcing renewable energy, scalable solutions and government regulation — bridging a gap between the need for decarbonization and the tools available to support it. Companies that scale back ambition based on reality are condemned for cowardice instead of being lauded for honesty.   

Opposing views will lead to inaction 

Exacerbating the issue is the pushback and, in some cases, prohibition on the use of voluntary carbon offsets and credits towards net zero goals. A corporate carbon reduction tool that seemed like a sure bet 3-4 years ago is now mired in controversy and facing an as yet-to-be defined future following a series of articles that questioned the integrity of the market in 2023. Over 80 international environmental NGOs on the activist end of the spectrum oppose the use of carbon credits, while others on the action end of the spectrum (like WHC) support high-integrity credits with better guardrails, seeing the need to keep this option for corporate net zero goals and to leverage it for nature-based carbon offsets to deliver co-benefits for biodiversity, water and security. This discussion is also impacting the nascent biodiversity credits market, as buyers fear treading in possibly controversial waters. 

The dualities continue in the greenwashing versus greenhushing debate, with some companies erasing all mention of sustainability from their reports and even embracing anti-sustainability while others double down on the efforts. It continues in the pushback to the SEC climate ruling where, according to Tim Mohin, the noted sustainability/ESG expert, 15 briefs have been filed opposing the rule with 16 filed in support.  

What to do about this new world of chaotic corporate action? or,  

Should we wait it out? 

The political winds that seemed to have fanned the flames of the anti-ESG movement appear to be abating. According to reporting in Politico, mentions of “ESG” and “woke capital” in conservative media outlets like Fox News, Breitbart, New York Post and Newsmax are down 78% from their peak in June 2023, and engagement on these topics via likes, retweets and shares of related news articles has fallen 93% from its April 2023 peak, and polls show little public interest in the topic. 

Consumers remain interested in sustainable products. A new TikTok hashtag #UnderconsumptionCore shows environmental consciousness in young consumers while a recent report by Mintel finds consumers over the age of 55 have the strongest levels of action and engagement to sustainability. 

As Andrew Winston writes, “the Sustainability Recession will end – but not by choice”. 

Let’s do better 

In the meantime, we need to become better partners in corporate efforts. We need to become literate readers of corporate reports. We have to increase our understanding of the challenges of solving interconnected problems with singular approaches. We can’t decry progress if it’s not perfect.  

As partners to the private sector, WHC and WEC and their soon-to-be-launched combined entity understand that the distance between the C-Suite and the site of industrial operation is vast in both a physical and metaphorical sense. We know that companies don’t always join the dots adequately between ambition and action and that siloes are the de facto design of sustainability efforts. But we don’t punish our partners for mistakes, criticize them for using evidence to change goals, or walk away when efforts to work together are slower than we want. 

This is a curious and challenging time for corporate environmental sustainability with pressure from government, from finance, and from stakeholders both incredibly knowledgeable and willfully ignorant. It’s also a challenging time for the planet overall as climate change accelerates, biodiversity loss refuses to abate, and water becomes the next pressing issue. To allow one to contribute to solving the other, we must resist pointing fingers of blame for every accident, every restated goal or every corporate decision made in the face of fickle political winds.  

To explore this issue further, to highlight the various intersections across sustainability concerns — and to break down the siloes that have emerged within the corporate sustainability space — I will be guest editing a new issue of Amplify along with Director of WEC Europe e.V. Frank Werner. This issue will feature articles on the capacity of sustainability solutions to address multiple concerns, as well as the challenges of addressing greenwashing and greenhushing when developing a sustainability strategy. The deadline for abstracts is September 30 — learn more at https://www.cutter.com/call-papers#sustainintersections.