What is Greenwashing?

2 min read

Tesla CEO Elon Musk was recently accused of not understanding ESG (Environmental Social and Governance) and of greenwashing. Other corporate executives and many large companies have also been accused of the same act. Greenwashing is when a company or organisation is misleading about its environmental credentials. This usually comes in the form of companies or organisations claiming to be ‘eco-friendly’, ‘sustainable’ or ‘carbon neutral’, meanwhile investigations reveal these claims as exaggerated.

Energy greenwashing or “utility greenwashing”, comes in the form of:

• marketing with green colour and images.
• exaggerated carbon neutrality claims.
• electricity suppliers offsetting energy and thereby marketing themselves as green.
• renewable energy companies hiding the excessive use of fossil fuels in their supply chain.

One major example of greenwashing is when electricity suppliers claim to offer green tariffs (electricity from renewable energy plants), when in reality, they buy electricity from a mix of renewables and fossil fuels, purchase green certificates, and then sell the electricity to mislead customers.

In 2021, a report from Sierra Club found that 79 US companies jointly received 17 out of 100 for a mark that measured how much they were committing to their plans to go green.

Other greenwashing examples:

• BP changed their name to Beyond Petroleum and publicly installed solar panels to some of their filling stations. It was later found that more than 96% of their yearly spend was on fossil fuels.
• Shell (who also produce and supply electricity), whose 2021 fourth quarter report reveals their plan to invest $2-3 billion into renewable energy while planning to invest $8-10 billion into integrated gas and chemicals & products. This despite their target of selling more than 560 TWh of clean power to customers by 2030.

What do you think of greenwashing? Share your thoughts by replying to this email!

For more information on greenwashing, or any other energy related articles, view the blog posts on my website and be sure to open my weekly emails every Tuesday at 9am CAT.

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