Corporate concerns about greenwashing must focus on more than inconsistent policies, incomplete disclosures and appropriate sustainability reporting frameworks and standards. The board and management must prioritise that the total sustainability concept is in the public interest, the goals are independently set, and procedures are established to follow due process.
For any ESG compliance and sustainability reporting to be credible, global standards that deliver transparency on impacts and accountability on sustainable behaviour must address the challenges of biodiversity, climate change, health crises, and inequality with the end goal in mind.
In addition, sustainability frameworks must have a definite reporting obligation to fully address greenwashing concerns that affect ESG ratings and rankings.
Credibility through sustainability accountability
‘Greenwashing’ concerns cannot be addressed without practical reporting standards. Therefore, identify the role of the various ESG standards, frameworks, ratings and rankers to measure and manage achieving sustainable business practices.
The primary reason for this red flag is based on a recent report by the Center for Sustainable Business at the University of Pittsburgh. These findings indicate that companies are either completely greenwashing their environmental claims or failing to disclose and communicate with stakeholders.
- 43% of employees believe their companies struggle to prioritise short-term growth and disinterest in sustainability.
- 40% of employees agreed, “Our leaders don’t believe in sustainability”.
- Two-thirds of surveyed employees did not feel their companies had undertaken meaningful action to achieve climate targets.
To stay on top of the corporate sustainability agenda, the board and management must pay attention to sustainability concerns in the corporate culture and mindset with the following guidelines:
- Conduct in-house surveys at regular intervals about what workers think of their company’s climate change efforts and track the trends.
- Demand complete and unfiltered sustainability data instead of cherry-picked information, visit sites and gather third-party due diligence intelligence on the challenges.
- to chat directly with employees, gather intel on how well an organisation executes a strategy, and see what the workers are experiencing.
- Based on the above survey, management is indifferent towards sustainability. The board must identify and address the challenges and ensure significant strides are taken to reach the environmental goals.
- Simultaneously, balance the focus on profits and sustainable short-term goals.
- Management teams are accountable and, at the same time, motivated to do so without criticism and accusations of the consequences of non-compliance to sustainability mandates.
- Define the sustainability value(s) the organisation creates for the environment and society.
- Embed and integrated sustainability into corporate policies, procedures and practice.
- Allocate money and resources to train employees in corporate sustainability goals and environmental protection.
- Shift the corporate focus away from singular sustainability fixations, quarterly profits and pleasing the market.
To address the above issues, The Corporate Governance Institute by Copenhagen Compliance has developed Esguiera training and certification to avoid ESG misinformation and clarify the distinction between standards, frameworks, rankings and ratings, and corporate approach and management purpose differences;
- Esguiera clarifies from the start that the corporate sustainability landscape must have a clear direction and a strategic goal that provides compliance standards, sustainable frameworks and guiding principles. Esguiera further ensures that sustainability standard settings are aligned, supports improvements in corporate accountability, and responds to the needs of all stakeholders.
- Esguiera integrates ESG-related risks into the risk management frameworks with critical objectives of transparency, accountability, stress-testing on standards, ESG risk management, exposures, reporting and sustainable monitoring.
Learn more here here.