"Walk the Talk" on climate protection!

Until 2019, the topic of climate protection gradually moved to the forefront of public awareness. With the outbreak of the pandemic, it was pushed off the top of the attention scale for a while - then came the Russian war of aggression in Ukraine; coupled with a discussion about energy shortages and the extension of the operating lives of nuclear and coal-fired power plants. 

We don't hear much about the issue at the moment, and yet: in the medium term, climate protection will become the dominant topic in all our lives, both professionally and privately. Those people in Florida who lost the basis of their livelihoods in Hurricane Ian at the end of last week (just one year after Ida had equally devastating consequences nearby); those people in regions affected by drought or sinking in rising sea levels have known this for a long time. And as soon as the war and the pandemic show signs of easing, a broader public will (have to) start thinking about global warming and climate protection again.

Between aspiration and reality

Leading companies, of course, have already begun to do the same. As of August 2021, nearly one-third of Europe's one thousand largest publicly traded companies were officially aiming to achieve net zero emissions by 2050. But only five percent are actually on track to realistically reach their goal if they continue on their current course, according to the Accenture study "Reaching Net Zero by 2050." This discrepancy between aspiration and reality does not, of course, stop companies from making grandiose pronouncements at five-year meetings such as the "COP 26" climate conference in Glasgow. 

The tenor is always similar: "We want this, we can do it!" - but, to refer once again to the Accenture study mentioned above: A way to achieve these goals in the fewest cases recognizable. This glaring difference between superficial talk and effective action will become a highly explosive problem in the coming years and will lead to further alienation of companies from their stakeholders. The level of pressure for major change that now exists can be seen from the fact that even companies from highly regulated industries such as finance are committing to achieving binding targets in the future - even though they have no idea at this point how to achieve them.

More than a communication problem

What happens when the offensively communicated claim and the actual actions differ so greatly? Then the term greenwashing is heard more and more often in customer surveys and focus groups. Greenwashing is the attempt by companies, institutions or brands to present themselves as particularly environmentally aware and environmentally friendly by donating money to ecological projects, PR measures or advertising campaigns. However, the communication is only the downstream phenomenon that attempts to conceal the underlying, more fundamental problems. Greenwashing will sooner or later be mercilessly recognized by the general public in this age of almost unlimited information exchange and punished for what it is: fraud.

Just recently, Shell and Exxon, two representatives of the exposed oil industry, learned that short-term orientation and superficial greenwashing are not accepted by the general public or the regulator. Shell - in addition to a massive PR fiasco - was forced by court order to reduce emissions by 45 percent by 2030 (compared to 2019). At Exxon, the influence of an activist hedge fund put three "green" directors on the board at once. What happened at these fossil fuel companies is a harbinger of many more activist influences in various industries by stakeholders who are no longer willing to accept superficial whitewashes of individual companies.

In recent years, market practices and behavior patterns have become established, which are now being gradually illuminated and exposed. Customers, consumers and other stakeholders are sometimes systematically led around by the nose. Marketing and communications experts bear a not insignificant share of the blame for this due to a lack of questioning of the situation and a lack of fact-checking. 

The problem is profound, as two examples illustrate:

• Environmental, Social & Governance (ESG) Ratings: So far, there are no general and widely accepted standards that create the necessary transparency, bindingness and comparability. For example, the financial industry has relied for years on the market leader MSCI for ESG ratings, which supplies almost all major financial institutions with aggregated fundamental data. MSCI's ESG rating is a subjective, unregulated rating system that shows not a company's impact on the environment, but the impact of an environmentally focused world on the company.Or, put more simply, it's whether the climate change-focused world could reduce corporate profits. (Bloomberg Businessweek: How to make a killing calling companies green, 2021). In the financial industry today, ESG is largely a marketing term rather than a real commitment. The criteria for evaluating companies' ESG efforts are set randomly and arbitrarily by product providers without transparency. "Sustainable" ESG funds thus make tradeoffs, weighing whether to buy shares in an electric car company that exploits workers or shares in an oil company with a truly "diverse" board. This unregulated arbitrariness has strange excesses. How, for example, can Exxon Mobil Corp. remain in an ESG index as one of the largest suppliers of fossil fuels that warm the atmosphere, while Tesla flies out? (NZZ: Tesla hits the skids, 21.5.2022).
  It is already becoming apparent that stronger regulations and requirements are to be expected in the near future, and that is right and important. Because transparency creates trust.
• Compensations and off-settings: Skimming mechanisms are now widely used to give consumers the opportunity to act in an environmentally conscious way. At online retailers, you can add "full climate compensation" to your shopping cart. At the vacation airline, you can compensate your guilty conscience with an additional obolus for a small surcharge. In a report published in May 2022 by the consultancy Carbon Direct, it is stated that the market for climate compensation services "largely consists of projects of questionable quality". Climate offset projects are favored by companies to legitimize existing behaviors and consumption patterns, rather than to spur fundamental change and new solutions. The majority of consumers imagine these projects to primarily fund reforestation and renaturation. The reality is far from "tree planting." Less than four percent of all global climate offset projects remove climate gases from the atmosphere. Ninety-six percent of projects merely seek to reduce further expansive growth of climate-damaging emissions. (Taskforce on Scaling Voluntary Carbon Markets (TSVCM); Inventory analysis, 2020).

These two examples show the widespread superficiality of many efforts. They also illustrate that many actors treat climate protection like a short-term hype topic that will soon be replaced by the next topic. At the beginning of this text, I said myself that the public focus is currently on other crises - but to believe that it will no longer return to global warming and the need for climate protection is as unrealistic as it is dangerous.

Words must be followed by actions

What many companies pay little attention to is the danger inherent in superficial approaches to their own climate protection efforts. Climate protection is not one of the usual hypes of the marketing industry. The topic will not become less important or even disappear. Too often today, unjustified sustainability promises are adopted in communications without in-depth scrutiny. With exaggerated campaigns, fireworks are lit about the supposedly sustainable exploits of large companies and their captains. Many of the largest emitters of climate-damaging gases display a surprising naiveté when they try to put their ecological efforts in the right light with a well-orchestrated press image. The barely concealed hope: to positively influence the share price. 

When the head of a major emitter of greenhouse gases allows himself to be photographed fishing plastic waste out of the sea, the company is merely proving that it lacks a long-term, resilient plan for achieving the announced reduction targets. The crux of the matter is that the people who are making the promises for the future today will most likely no longer be held personally accountable for their misdeeds due to the long time horizon. 

Many marketers use the consumers' freedom of choice as an argument for not introducing more environmentally friendly products and services with the vehemence and consistency that would be appropriate in view of the climate situation (one then hears arguments such as "Then we will become more expensive and the customers will move away" or, even more arrogantly, "If you want climate protection, you can buy somewhere else!

Time to rise to the challenge

Marketers and communicators must take a leading role and rise to the challenge posed by (largely man-made) global warming. Precisely because of the great risk of reputational damage to companies and brands, a superficial approach to climate protection issues must be avoided. This is not a new insight. Anyone who has mastered the basics of professional communication knows the importance of a well-founded "Reason-Why," i.e., a sound rationale that can withstand critical scrutiny and in-depth journalistic investigation.

Challenge and opportunity at the same time

This is a unique opportunity for marketing and communications managers to actively initiate major changes and to take a seat at the decision-makers' table in the company (where, as we all know, they still rarely sit). Precisely because customers, employees and the general public have clear expectations, these interests must be used as relevant arguments in the management of the companies for strategy development and direction control. Public pressure can be used to initiate serious changes in corporate strategy through concrete action.

In this context, marketers and communicators would be well advised to take a close look at the realities and possibilities of the climate protection activities propagated on the market. Many already fail to differentiate between "carbon avoidance" and "carbon capture".

The market and the sum of the investments made will grow rapidly in the coming years. In this context, many people are in a gold-digger mood. Those who do not take a close look and do not recognize the essential connections run the risk of sinking their money into climate protection projects of dubious quality. 

The growth and the expected size of the market will attract the interest of the public. It is only a matter of time that investigative media representatives will take up this issue and, by means of thorough research, will be able to expose many of the projects on offer as having little effect or even as being lies and deception.

Those companies that have invested in good faith in such projects are then threatened - apart from the economic damage - with massive reputational damage due to the negative communication to be expected.

It should be noted that to date only a small number of companies have committed themselves to consistently striving for circular management (this would for once be a consistent guide to the nebulous "zero emissions promises" mentioned at the beginning of the text, which would then have to be fleshed out). From a marketing point of view, this is a missed opportunity. A consistent focus on comprehensive support over the entire product life cycle could even counteract the well-known problem of declining customer loyalty for many companies. After all, if you support customers over the entire life cycle of a product, you will know at the right moment when it is effective and efficient to offer a sustainable replacement.

About the Author: Christian Baertschi is a founding partner of Open Opportunities AG, which shows companies and brands how to communicate more successfully through concrete actions. With Real Carbon Capture the company offers a solution that enables the permanent removal of CO₂ from the atmosphere into a profitable, circular long-term business for all parties involved.