Could a climate pledge accreditation help stamp out greenwashing?

Climate transition, net zero, decarbonisation, stewardship. All those words have been added to the corporate lexicon and every company with its eyes on the PR ball has a published plan that makes use of them. 

It’s also standard practice for businesses to devote part of their websites to their environmental credentials. These often include pretty pictures of trees. There’s sometimes even a climate pledge progress update in the annual report. 

Washed in green? That’s what an awful lot of these activities are; little more than efforts to apply a coat of faux green paint to activities that give the finger to the Paris Accords. 

But how do financial institutions and insurance companies, justifiably under pressure to steer their investment capital towards the genuinely green-tinged and away from the greenwashed, tell which is which so that the good can be rewarded?

Willis Towers Watson, a broker and consultant, believes it has the answer. It is proposing something that looks very much like a climate kitemark, although it’s officially described as “an accreditation framework that provides insurance companies and financial institutions with a consistent approach to identifying which organisations have robust transition plans aligned to the Paris Agreement”. 

The people behind the idea might care to consider their own plan to reduce their emissions of corporate verbiage as part of a move to a clean English economy if they’re really serious about getting a credible scheme off the ground. 

There’s certainly something to be said for the idea of having an outside body help investors to sort the green corporate wheat from the cynical PR chaff, of which there’s been rather a lot of lately. 

To that end, Willis says it’s working with independent third-party groups including Volans, a consultancy responsible for the Bankers for Net Zero initiative, and the Climate Bonds Initiative (CBI), a global investment organisation committed to climate resilience. 

They plan to create a governance committee that will “roll out industry-specific solutions” (more verbiage, ugh) and create an accreditation framework. 

Mark Carney, UN special envoy for climate action and finance and the prime minister’s finance adviser for COP26, has given it the thumbs up. “Willis Towers Watson’s work to develop tools to assess companies’ transition plans is a valuable contribution to this process to ensure that every professional financial decision takes climate change into account,” he declared. 

Here’s the problem: this is a very business-y initiative and that gives me pause. Such industry-led initiatives don’t have a great track record. Jargon, of which the announcement has a lot, is also very often the first port of call when businesses and their organisations are seeking to cover up sins. 

The very real danger of this “accreditation” is that if it becomes too easy to achieve, if it becomes more rubber stamp for those that sign up and pay up rather than hard-earned mark of quality, it could easily add to the greenwashing one would hope that its founders want to stamp out

Would a company like Shell ultimately qualify? That’s a very interesting question. The oil major has been trumpeting its climate pledges but they have been sharply criticised by activist shareholders, who argue that they aren’t aligned with the Paris Accords. 

For those accords to be defended, the “frameworks” and “criteria” adopted by the proposed governance committee will need to sufficiently robust and clearly spelled out.

This scheme is clearly well-intentioned, but it has a lot still to prove. What might give it a shot in the arm in terms of credibility would be for Willis and co to call for input from groups that are closer to the green establishment than they are the corporate one.