Greenwashing or actual goals? This is how we make companies keep their promises

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Climate change is happening right now. Australian bushfires, floods in Indonesia and frost-free fields in America and Europe threaten crops and food supply.

Many companies have responded to this global crisis by making fluffy statements about how they contribute to a better world by being more ‘green’, ‘sustainable’ and even ‘completely carbon-neutral’.

Their intentions are admirable and extremely important if we wish to slow down the pace of climate change. But how can we make sure that companies keep their green promises?

In a new essay published by Samfundsøkonomen, Leonard Seabrooke, Professor at the Department of Organization at CBS, shares his opinion on the matter:

“It is crucial that we find new ways for companies to account for their environmental impact,” he says.

Companies have to be more transparent

It is not enough that companies state an aim of being carbon neutral by 2030. They have to make a transparent plan for reaching this goal, says Leonard Seabrooke and elaborates:

“Richard Murphy, Director of the Corporate Accountability Network, and I believe we need a new reporting standard for sustainable cost accounting where companies are obliged to report exactly how they plan to be net carbon zero compliant,” he says.

This way stakeholders, investors and civil society will be able to get information about how sustainable companies actually are.

“A new green reporting standard will provide better information for stakeholders to decide where they wish to invest or which companies need more encouragement to implement changes,” Leonard Seabrooke explains.

Accounting is also political

Accounting is often seen as a technicality rather than a political commitment but that is a misconception, according to Leonard Seabrooke:

“Sustainable cost accounting can pave the way for an understanding of accounting as a way to encourage positive, social, economic and environmental change. It also provides companies with a clear incentive to invest in technology that can help them reach their green goals,” he concludes.

Read more about Leonard Seabrooke’s research on this issue here.

For more information contact journalist Ida Eriksen